[FFW News] Red Sea tensions rise

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FYI: Last newsletter before Christmas…🎄🎄🎄And this edition of Freight Weekly is about threats to shipping across various global hot zones.

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📈 BY THE NUMBERS: Important numbers impacting freight and logistics

⛽ Diesel: $3.894 gal (🔽from $3.987 last week) - Source: EIA

✈️ Air Cargo Index (Noc ‘23): 169.3 (🔼from 166.4 in Oct ‘23) - Source: FRED

🚢 Global Container Index: $1,281.40 - Source: Freightos

Logistics News for Dec. 21, 2023

🙀Houthi attacks on commercial shipping raise fears in the Red Sea

The Houthi militants of Yemen, backed by Iran, declared support for Hamas in the ongoing conflict between the Israeli military and the terror group based in the Gaza Strip. Houthi militants have attacked commercial shipping through the Red Sea at the nexus of the Suez. This has resulted in fears among ocean carriers who service trade through a trade route that typically accounts for 12 percent of all global trade volumes. Disruptions also impact about 30 percent of all global container volumes. Red Sea trade is vital to global economic security, given that much of Europe relies on trade through these waters. The Suez Canal, which is a trade chokepoint controlled by the Egyptian Government, is as vital as the whole body of the Red Sea to the Middle East, Central Asia, and North Africa. More…

🙃Piracy fears present as merchant ship hijacked off the coast of Somalia

As the Red Sea crisis persists, a merchant ship flying the Maltese flag, MV Ruen, was attacked by pirates of an unknown group at the time of the initial report, says the Spanish Defense Ministry. A warship from the NATO partner nation responded to mayday from the Ruen and reports of the hijacking. Apparently, the ship has remained under the control of the pirates since December 14. A statement from the EU Naval Force indicates the crew of the Ruen, 18 souls, are still being held, besides one crew member who was evacuated for medical care. Ruen is operated by Navibulgar of Bulgaria, and crewed by Bulgarian, Angolan, and Myanmar nationals. EUNAVFOR // AP via Voice of America // Reuters

😑120 box ships diverted due to Houthi pressure in the Red Sea

Since the Houthi attacks and privacy have sparked in the Red Sea, about 120 box ships have diverted from Red Sea-Suez transits. Instead, east-west trade shifted to the traditional trade route around the rocky headland of the Cape of Good Hope in South Africa. This adds about 1,900 nautical miles and 10 more days to container service between Asia and much of Western Europe. Read more…

🫠China pushes gray zone against Philippine reef in South China Sea

On the other side of the globe, tensions in the South China Sea continue to be, well, tense…Maritime militia and fishing fleet vessels from the People’s Republic of China are staging on a gray zone inner lagoon within striking range of the Philippine-occupied Second Thomas Shoal. This shoal is a major flashpoint in the multinational contests over the Spratly Islands. Ray Powell, director of SeaLight, said, “[t]his highly unusual invasion of the shoal's interior appears to have been a calculated show of force by Beijing.” Read Powell’s report at SeaLight…

🫥China continues to show force as Taiwan’s presidential election nears

North in the Taiwan Strait, Beijing is flexing military power as the ROC prepares for the January 13 presidential and parliamentary races. PRC continues to view the small island as its sovereign territory and is ratcheting up a military presence to bully Taipei into giving in. This isn’t really all that surprising, given the decades-long division between the Nationalists and Communists. Read more here…

☕Don’t spill your morning coffee reading these stories…☕

• “Op-Ed: Somali Pirates Are Back, But a Full-Scale Return is Unlikely” - The Maritime Executive

• “Auction moves 2nd lot of Yellow terminals” - Freight Waves

• “IANA supports AAR call for reopening El Paso & Eagle Pass Crossings” - American Journal of Transportation

• “Global trade shudders over blockages in the Suez and Panama” - Financial Times

Compiled by Michael McGrady – news analyst and writer.

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