Paul Berger and Costas Paris of The Wall Street Journal report that disruptions from the diversions around the Red Sea violence are backing up vessels with the peak shipping season still looming. They write:
Ship backups that plagued seaports during the Covid pandemic are making a comeback, as vessel diversions because of attacks in the Red Sea trigger gridlock and soaring costs at the start of the peak shipping season.
Flotillas of containerships and bulk carriers are growing off the coasts of Singapore, Malaysia, South Korea and China while ports in Spain and other parts of Europe look to dig out from container piles.
Houthi rebel attacks on commercial shipping in the Red Sea, which have effectively closed the Suez Canal since the end of last year, are being felt at faraway ports as the disruptions extend voyage times, throw ships off schedule and strand sea containers. […]
The fast-rising shipping prices have been a boon to container lines. Danish shipping major A.P. Moller-Maersk this month raised its full-year guidance for the second time in roughly a month, projecting a $3 billion improvement in free cash flow for the year over its previous forecast.
“Trade flows will eventually return to normal when the Gaza conflict is resolved and ships return to the Red Sea,” said Nils Haupt, the chief spokesman for German boxship operator Hapag-Lloyd. “Freight rates will fall, because there is no escaping that there is a lot of extra capacity at sea.”
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