Speaking at the Marine Money conference in Singapore earlier today, Jeremy Nixon, CEO of Ocean Network Express, warned that container shipping disruptions in the southern Red Sea will persist “well into 2025.”
“Based on current geopolitical developments at the end of September, it looks quite likely that we will continue to have Cape of Good Hope routing well into 2025,” Nixon said on the sidelines of the conference.
He said the diversion of container ships around the Cape of Good Hope to avoid Iran-backed Houthi drone and missile attacks in the Red Sea has resulted in forward cargo ordering jumping by 10% in North America on a ton-mile basis. He said this outpaced the injection of container supply for the year.
Nixon’s container ship fleet is comprised of more than 200 vessels worldwide. The direct result of tight container capacity has pushed prices higher.
Nixon also commented on looming labor strikes to hit US East/Gulf Coast ports next Tuesday:
“We’re preparing now for the 30th of September when we expect that the terminals all along the East Coast will come to a stop.”
Back to the Red Sea, the militaries of the US and European Allies have not ensured freedom of navigation and maritime security in the critical maritime chokepoint.
Since October 2023, Houthi rebels have launched over 80 attacks on vessels in the region.
The latest Bloomberg data shows that no LNG vessels are traversing the critical waterway, with destinations in Europe, the US, and South America.
Anas Alhajji, an energy market expert based in Dallas, recently wrote on X, “Whoever controls the Red Sea controls the trade of China, India, Russia, and the Middle East. Houthis are just a tool…”
Tyler Durden
Tue, 09/24/2024 – 12:45
