[Freight Weekly] No End in Sight for Red Sea Crisis?

🎆Happy Independence Day to our subscribers in the United States!🎆

Enjoy…meanwhile…There is no end in sight for the Red Sea crisis, according to container futures. Trading trends of China’s Asia-North Europe container shipping future grew by double digits for the 2025 freight level expectations. This indicates to shippers that the Houthi crisis in the Red Sea will continue into 2025:

• The Red Sea crisis is ongoing as Yemeni Houthi militants backed by Iran and their allied terror groups continue to molest international shipping around the Horn of Africa, in the Red Sea, Gulf of Aden, Arabian Sea, and the waters below the Suez. International task forces have been deployed.

• 90 percent of container vessels are delayed in the port of Singapore due to the Red Sea crisis — this is due to the vast majority of cargo between Singapore and Western Europe transiting through the Suez Canal route.

• The Loadstar reports the EC2502 (February 2025) and EC2504 (April 2025) contracts (both indices on container futures) gained 17 percent to 3,711 points and 27 percent to just around 3,097 points, respectively.

• Futures are climbing because of the increased cost of transiting around the Cape of Good Hope in South Africa. That’s literally several more days, thousands of more nautical miles, and thousands of more dollars in fuel.

• Maritime traffic through the Suez Canal and Bab El-Mandeb Strait has halved, while traffic via the Cape of Good Hope has doubled. Travel distances and times for Red Sea vessels surged in March 2024.

Bottom line: As we’ve reported to you all several times before, the ongoing crisis in the Red Sea has further complicated international trade. While ocean carriers and shippers have adapted, the costs present a problematic scenario for trade.

CONTEXT: Chinese exporters raise fears of Christmas freight crisis

✈️E-commerce regulatory crackdown to harm booming air freight market✈️

The latest data from the International Air Transport Association (IATA) shows a strong air freight market seeing growth but e-commerce crackdowns on Chinese platforms in Western countries could harm that growth. Here’s what to know:

• Total demand rose by 14.7 percent compared to May 2023 levels. This is the sixth consecutive month of double-digit year-on-year growth rates.

• “The sector benefitted from trade growth, booming e-commerce and capacity constraints on maritime shipping,” said Willie Walsh, director general of IATA. “The outlook remains largely positive with purchasing managers showing expectations for future growth.” This noteworthy.

• However, Walsh added the industry should expect a “dampening” as “the US imposes stricter conditions on e-commerce deliveries from China.”

• S&P Journal of Commerce points to platforms like Temu and Shein.

Bottom line: Trade wars never seem to end. IATA expectations suggest that protectionism and the ongoing trade showdown between Washington and Beijing could further drive overall consumer costs, among other factors.

CONTEXT: EU targets the likes of Temu and Shein with cheap goods crackdown

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