Policy & Compliance
and the imposition of surcharges. The container freight rates on the Asia-Europe route increased by around US$1,800. On the Far East to US East Coast, the rates increased by US$4,200 per container. It should be noted that since Chinese New Year, rates have declined somewhat. Container carriers have imposed transportation disruption surcharges on regular freight rates; Maersk’s ranged from US$200 to US$450 on cargo originating from the Far East. The May 2024 BIFAlink contains a more detailed analysis of these additional charges. Shippers and forwarders are calling for increased transparency regarding surcharges, urging governments to establish a list of accepted surcharges or to set up a surcharge assessment tool for example. These surcharges should only cover incurred costs, be calculated in a transparent way and carriers should carry the burden of proof for the need of the surcharge. The Suez Canal crisis has had impacts on trade. The press, as ever, did not help with
scaremongering about shortages of tea in UK. The delays negatively impacted most on the car manufacturing sector, which is heavily dependent on receiving just-in-time supplies. Both Tesla and Volvo paused production due to component shortages. The Red Sea route also handles large quantities of key energy material, including crude oil, LNG, coal and coke, as well as metal products both north and southbound. The fear is that these increased costs will lead to higher inflation if sustained. Other costs Other impacts include the increased cost of naval operations, the loss of the Suez Canal toll revenue and foreign currency to Egypt. Canal revenues decreased by 40% from US$47 million in late November 2023 to US$28 million in the first week of January 2024. During this period revenues from containerships declined by 66%. Regarding the environmental costs, these are complex and difficult to assess. The sinking of
the Rubymar posed a direct pollution threat to the marine environment. The longer distances sailed increase carbon emissions, with the added complexity that a 1% increase in speed raises emissions by 2.2%. An increase of 1 knot from 16 to 17knots is actually a 6.3% speed increase, leading to emissions at 14% higher. Finally, the paper outlines some policy considerations, highlighting that “the increased occurrence of crises and inter-connectedness of transport systems calls for increased global coordination to ensure that freight transport systems continue to be a backbone of global supply chains”. The disruption to seafreight services stemming from wider Middle East issues has now lasted approximately six months. How much longer it will continue is unclear, but the Cape of Good Hope route and all that it entails seem to be accepted as the new normal – at least for the time being. To read the full report from the ITF, scan the QR code, right.
“ The Cape of Good Hope route and all that it entails seem to be accepted as the new normal – at least for the time being...
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June 2024 | 25
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