Exporters explore cargo flights as way out of deepening Red Sea bottleneck

Iran-backed Houthi militants in Yemen have stepped up attacks on vessels in the Red Sea since Nov. 19 to show support for Hamas during Israel’s military offensive in Gaza.The attacks have disrupted a key trade route linking Europe and North America with Asia via the Suez Canal. Container shipping costs have surged, more than tripling in some cases, as companies seek to move goods via other, often longer, ocean routes

Alan Baer, CEO of OL USA, has teams advising shipping and logistics clients to prepare for at least 90 days of Red Sea disruptions.“It doesn’t help that it’s Christmas weekend,” said Baer. “We’ll have a quiet period from now until Jan. 2, and then everybody will be frenetic.”

Hellmann has seen increased demand for combined air and sea routing for consumer goods like apparel as well as electronics and tech items, he said. For example, that could mean goods being transported first by sea to a port in Dubai, where they are then loaded onto planes.“This alternative route allows customers to avoid the danger zone in the Red Sea and the long voyage around the southern tip of Africa,” Kleine-Lasthues told Reuters.

It is critical that European companies are able to use the Suez Canal again to ensure supplies of clothes from Asia, the industry source said.

The timing of the Red Sea security issues compounds difficulties for shippers, said Jeb Clulow, partner in law firm Reed Smith’s transportation industry groupThe Panama Canal is struggling with severe drought and has slashed the number of ship passages it allows. In addition, there is a race to get goods in transit before Chinese New Year factory closures planned for Feb. 10-17, which can disrupt supplies for a month or longer.Meanwhile, large container ship owners have begun adding fees, including emergency surcharges, for cargo affected by the Red Sea disruptions.

In a customer notice on Wednesday,20 Dec , French shipping group CMA CGM announced fees of $1,575 per 20-foot container, $2,700 per 40-foot container and $3,000 for refrigerated containers and special equipment for cargo traveling to and from Red Sea ports.