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The Impact Of The Palestinian-Israeli Conflict On The Shipping Market

Dec 22, 2023 Leave a message

Since the outbreak of a new round of Palestinian-Israeli conflicts on October 7, as Israel continues to advance in the Gaza Strip, various dissatisfied forces have also joined in attacks on Israel. The increasing situation in the Red Sea has triggered concerns in the global shipping industry. . Xinhua News Agency quoted reports from the Associated Press and Agence France-Presse as saying that the Houthi armed forces have attacked Israel three times "in support of Palestine". The Houthi armed forces only claimed responsibility for the attack on October 31, and since then they have attacked Israel in the Red Sea area. "Israeli-linked" commercial ships have carried out continuous attacks and posed a huge threat to shipping in the Red Sea area. The attacks by Houthi armed forces on merchant ships in the Red Sea have aroused concerns in the United States and other Western countries. Israel frequently joins hands with relevant countries to patrol the Red Sea, which is an important signal of the spillover of the Palestinian-Israeli conflict.

The continued deterioration of the situation in the Red Sea has brought the risk of suspension of international shipping, which will have a huge impact on global shipping. The Red Sea area is responsible for about 10% to 12% of the world's trade transportation, with up to 17,000 ships passing through every day, and for shipping companies that need to pass through the Suez Canal, entering the Red Sea area is unavoidable. In the short term, the escalation of the situation in the Red Sea will increase global trade costs and delays. Freight rates for ships passing through the Suez Canal may jump in the short term, while ships that bypass the Cape of Good Hope will increase global trade costs and delays, making the global supply chain even worse. In the long term, if the situation in the Red Sea remains unresolved and the Palestinian-Israeli conflict further intensifies, the Suez Canal may be at risk of being completely closed, and renewed imbalances in the supply chain may put the European region at risk of inflation again, making The ECB's previous efforts have been in vain, and the European economy is at risk of falling into recession.

According to this situation, our company make the following announcement:

Affected by the profound impact of the Palestinian-Israeli conflict and the normal operation of the Suez Canal, major shipping companies (alliances) have successively notified plans to suspend operations and stop receiving goods on the Red Sea route. As a result, prices in the Middle East and Red Sea routes have increased. The Middle East has exploded due to the Red Sea route. All sailings are suspended, and original cargo continues to flow into Saudi Arabia. The Middle East route will see a substantial price increase. Customers who need to ship goods should be prepared for price increases in advance.
At present, the price is still in the adjustment stage, and the market price is relatively chaotic. Next week, shipping companies will push for a large-scale increase due to cost pressure!

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