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Red Sea Crisis

Overview of the Red Sea Crisis

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Overview of the Red Sea Crisis

  • 17,000 Ships go through the Suez Canal Each year which is equivalent to 12% of global trades.
  • The Houthi attacks have had major impacts on the normal flow of work and have caused a frenzy in the international shipping of goods.
  • Major shipping companies have either stopped using the Red Sea completely or are rerouting to circumvent the Red Sea for safety.
  • This has led to taking a longer path around Africa’s Cape of Good Hope and an increase in global inflation.

Key Economic and Consumer Impacts

The longer routes have lead to:

  • Shortage of containers
  • Longer booking periods
  • Extended Shipping times
  • Increased Freight Expenses
  • Risk of escalating oil prices
  • Leading to a global inflation for wide range of goods

Impact on Freight Charges

The sea Freight sector is experiencing significant rate increases in various routes involving Jebel Ali. Shippings incoming to Jebel Ali seeing drastic changes of upto 350% leading to increased cost in goods by local manufacturers in the region.
  • Europe to Jebel Ali: +250%
  • Mediterranean to Jebel Ali: +300% 
  • Turkey to Jebel Ali: Shipments N/A
  • USA to Jebel Ali: +200%
Aside from the increase in costs in the local U.A.E market, shipping rates have also shot up for exports from the Jebel- Ali port. As of 15th January some  destinations have seen an increase of  over 600%.
  • Jebel Ali to Europe: +400%
  • Jebel Ali to the Mediterranean: +650%
  • Jebel Ali to East Africa: +150%
  • Jebel Ali to West Africa: +100%
  • Jebel Ali to USA: +300%
In addition to the significant rise in shipping freight costs, shipments are experiencing, on average, a 7 to 10 day extension in transit times along  with challenges and waiting periods in securing bookings.

To Conclude

The situation in the Red Sea is evolving daily, and we are proactively managing this through continuous discussions with our suppliers and shipping partners to assess the potential impact of any delays on delivery times and ensure a
seamless supply and delivery chain for our clients. Although the situation in the Red Sea may result in some delays and extended lead times, we at Regal Group remain dedicated to our mission and are committed to delivering the best possible service to all our clients.

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