Re-Routing via Cape of Good Hope & Avoiding the Suez Canal

As part of our commitment to keeping you informed, we wanted to share the latest developments in the international freight landscape, particularly regarding preventive measures being taken in the Red Sea.

In response to rising security concerns in the Suez Canal, carriers are implementing measures to avoid the increasingly dangerous waters, opting to reroute cargo traffic around the Cape of Good Hope, which was already seeing an uptick in rerouting due to the worsening drought conditions impacting the Panama Canal.

While these precautions are crucial for safety, they come with potential impacts on transit times, pricing, and capacity.

What does this mean for you?

• Extended Transit Times: Vessels navigating around the Cape of Good Hope may experience longer transit times.
• Increased Volatility: Pricing and capacity are expected to become more volatile in the near future. For example, in response to this situation, MSC/Maersk recently announced a General Rate Increase (GRI) of $1000 for shipments from Asia to the United States East Coast (USEC) and Gulf region.

How can we assist you during this challenging period?

• Inventory Management: We recommend thoroughly examining your inventory in transit and domestic inventory levels to mitigate potential disruptions. Legacy Supply Chain can also help reposition domestic inventory over the road or by rail.
• Creative Cargo Routing: Our team is ready to assist you with creative cargo routing solutions. These alternate shipping lanes could include bringing shipments through the US East Coast and utilizing overland transportation by rail or truck.

Given the heightening geopolitical tensions in the Suez Canal region, we anticipate these shipping conditions to persist through the Chinese New Year unless a cease-fire is achieved.