Red Sea situation

[Tradd]

Given I work in international shipping, I’m hip deep in the Red Sea situation. Europe is much more immediately affected than the US. The Red Sea/Suez is how everything from the Far East and India gets to Europe. Cargo from India uses the Suez to the US East Coast, but since so much comes in via the West Coast, our impact is less. A lot of pharmaceuticals and medical products are now made in India, though. I’ve not heard about any US shortages at this time. In the EU, some auto makers have suspended production due to delays in getting parts.

Transit times via the Cape of Good Hope are 10-14 days longer than via Suez. It can add $1 million in fuel costs.

[Rogar]

That's interesting. Thanks. Amid all the other global issues the costs of the Red Sea situation doesn't get much play in my recent news. Some sort of mid-east war escalation is a worry of mine, besides the supply problems.

[LDAHL]

I read about 12% of international trade passes through that corridor. The Egyptian government must be feeling the loss of transit fees.

[Tradd]

I read about 12% of international trade passes through that corridor. The Egyptian government must be feeling the loss of transit fees.

Big time. Toll depends on vessel type and size, but I’ve read $500K per ship one way is an average.

[jp1]

Interesting perspective. Tradd, I'm also curious about your take on the Panama Canal situation. Is that having a major effect on shipping?

[Tradd]

Interesting perspective. Tradd, I'm also curious about your take on the Panama Canal situation. Is that having a major effect on shipping?

Yes, the Panama Canal is affecting US shipments much more. A ton of Asia cargo to the east cost or the Gulf goes through the Canal. Maersk, one of the biggest carriers, is now going to rail containers across Panama, instead of trying to get ships through. That’s the way cargo was handled before the Canal was built.

[LDAHL]

World trade certainly seems to owe a great deal to DDG-64.