Aviation
DIMERCO: RED SEA DISRUPTIONS MAY LEAD TO POTENTIAL SHIFTS TO AIR FREIGHT
January 2, 2023

Recent disruptions at the Red Sea could prompt a shift in the mode of transport from sea to air and push ocean rates higher,  according to a recent report from Dimerco.

 

The global shipping and logistics company also gave an update on current issues impacting global logistics.

 

"Recent Red Sea disruptions may lead to increased ocean freight rates and potential shifts to air freight, especially for EU and US East Coast destinations," Dimerco said.

 

It added that major shipping alliances temporarily halted voyages after a missile attack, affecting THE, 2M, and Ocean Alliance, raising awareness about the potential consequences of a Suez Canal blockage.

 

In ocean freight, the report said all water routes to the US East Coast face "more stringent space constraints" due to the Panama Canal's low-water level issue.

 

In air freight, Dimerco said e-commerce air freight demand has slowed since mid-December, particularly for shipments to the United States and Europe.

 

The volcanic eruption in Iceland may also impact air freight to Europe, with carriers expected to reduce payload or potentially cancel flights, causing tight capacity and higher rates.

 

It added that the DP World Terminals in Australia also face prolonged industrial action, causing challenges in schedule integrity, space constraints, and elevated rates, extending beyond the initial anticipation.