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Red Sea Situation & Impact on Global Shipping

Global Shipping Route Changes Amid Houthi Rebel Attacks

Following the Houthi rebel attacks against commercial shipping in the Bab al-Mandab Strait that started in December 2023, all major container shipping lines have suspended their services via Red Sea and through the Suez Canal.

Ships are diverted via the Cape of Good Hope until a safe passsage can be guaranteeed, which significantly increases transit times betweeen Asia and Europe and require shipping lines to increase planned capacity. Cost increases are being implemented immediately.

Update July 2nd, 2024

Economic & Demand Outlook

In response to the ongoing crisis, shippers appear to have advanced their order volumes, resulting in an extended peak period. Traditionally, seasonal demand peaks in August at US ports. However, we've noticed an earlier surge in demand on the Transpacific (TP) route and robust inbound volumes for Europe.

In addition, inbound volumes for both the Middle East and Latin America (LATAM) continue to be strong, contributing to the upward pressure on rates.

Supply & Capacity

The ongoing conflict in the Red Sea has absorbed all additional capacity that was introduced to the market due to the longer detour around Africa. In fact, the net capacity is currently negative due to ongoing delays, congestion, route changes, and other related issues. The extended transit times are also impacting the return of empty equipment, creating a persistent problem across Asia.

To mitigate the situation for our customers, DHL has secured additional capacity on several extra loaders bound for Europe and the US. This action is part of our ongoing commitment to provide reliable and efficient services despite the challenging circumstances.

Schedules & Congestion

Port congestion is currently at an 18-month high, with multiple issues arising across Asia, including at major ports such as Singapore and Port Klang. Furthermore, escalating situations following strike actions at German ports have led to omitted port calls and blank sailings.

Mediterranean ports, such as Barcelona, are grappling with a double-digit increase in transshipment cargo due to routing changes that skip the Suez transit. These changes are placing significant strain on their capacity to handle the influx.

Freight Rates

Spot rates from Asia, particularly China, persist in their upward trend. The Shanghai Containerized Freight Index (SCFI) has recorded its 12th consecutive week of increase, and rates from Shanghai to California are almost five times higher than a year ago.

This consistent rise is prompting weekly adjustments of Peak Season Surcharge (PSS) and General Rate Increase (GRI) on Asia outbound trades. We're now observing spillover effects impacting secondary trades like Intra-Asia, which are also experiencing sharp rate increases in June.

DHL's Recommendation

In light of the current space crunch, DHL recommends considering Less than Container Load (LCL) as an alternative.

Our Ocean LCL offerings can serve as an effective solution for keeping critical goods moving. With pre-booking arrangements and allocation agreements with carriers, we can guarantee LCL space every week. The maximum shipment size is 15 cubic meters per file, and generally, we can offer shorter booking deadlines compared to Full Container Load (FCL).

Latest Customer Advisories

The Freight Forwarding Service Announcements keep you informed of events that may affect global shipping.

Update June 14th, 2024

Economic & Demand Outlook

Wage negotiations between port workers on the US east coast are due in September, which could cause shippers to rush out goods before that in a bid to avert any industrial action.

The overall market situation is expected to continue until Golden Week.

Supply & Capacity

Despite new vessel deliveries, the actual available capacity is decreasing due to delays/congestions, route changes (Red Sea), and repairs/scrapping.

Schedules & Congestion

Nearly half of all Asia-Europe westbound sailings have failed to depart on time as congestion escalates in Asian ports. Bottlenecks in Singapore have eased (380,000 teu of delayed vessels vs. 450,000 teu last week.), and the strain has shifted to Port Klang and Tanjung Pelepas (MY). Waiting times have also risen across all main Chinese port regions, with Shanghai and Qingdao experiencing the longest delays. Ships have had to wait as long as five days to berth in Shanghai. 

Recently, German ports are now also starting to see congestion, driven by local port strikes across Bremen, Bremerhaven and Hamburg.

Freight Rates

There were further double-digit increases in container spot freight rates this week, after a series of general rate increases and other surcharges came into effect on 1 June. Drewry’s World Container Index (WCI) recorded week-on-week gains of 14%, 17% and 11% on its Shanghai-Rotterdam/Genoa/LA routes, respectively.

The growing scarcity of equipment at Asian export hubs has led to a container price bubble (new container productions).

DHL's Recommendation

In light of the current space crunch, DHL recommends considering Less than Container Load (LCL) as an alternative.

Our Ocean LCL offerings can serve as an effective solution for keeping critical goods moving. With pre-booking arrangements and allocation agreements with carriers, we can guarantee LCL space every week. The maximum shipment size is 15 cubic meters per file, and generally, we can offer shorter booking deadlines compared to Full Container Load (FCL).

Update June 10th, 2024

Economic & Demand Outlook

Empty container stocks in Europe and Asia are decreasing due to prolonged transit times via Cape of Good Hope routes. This situation is exacerbated by customers increasing their order volumes for restocking and advancing seasonality.

A delicate geopolitical climate, coupled with apprehension over potential changes to Customs regulations post the US elections in November, is fueling demand on the Transpacific route.

Consequently, all major Beneficial Cargo Owners (BCOs) are increasing their forecasts as of May 2024.

Capacity Outlook

The idle fleet is currently minimal as all available capacity is deployed to meet the additional demand prompted by Cape routings. Non-artificial blank sailings in the Asia-Europe market are primarily due to capacity shortages, resulting in insufficient vessels to maintain regular weekly port calls. This lack of vessels leads to ongoing port omissions and blank sailings, perpetually fueling the rolling pools.

From Q3, alliances reorganization is set to absorb capacity, potentially triggering further disruptions in the supply chain and naturally escalating safety stocks and short-term demand.

Port congestion is an escalating issue. Data from Linerlytica reveals that container ships at Singapore are experiencing up to seven-day berthing delays, with a recent queue of up to 450,000 TEU of vessels.

Globally, worsening port congestion has immobilized approximately 2 million TEU of ships, nearly 7% of the fleet. This situation is indirectly bolstering carrier rate hikes.

Freight Rates

Carriers have declared significant General Rates Increases (GRIs) for May and June. The Shanghai Containerized Freight Index (SCFI) witnessed a week-over-week increment of 7%, with a notable rise of 12% on the Asia-Europe route. However, the actual rates needed to load cargo are proving to be even higher.

Our Recommendation

DHL recommends making pre-bookings 4 to 6 weeks prior to departure to ensure timely and efficient service.

Update February 15th, 2024

Ocean carriers continue to direct ships around the Cape of Good Hope, and adjust their schedules accordingly to the new and longer route. 


While equipment issues are noticeable, the Chinese New Year has aided stabilization in some areas. For now, port congestion and hinterland bottlenecks remain contained despite vessel backlogs. 

Freight Rates

Overall, rates remain high and are stabilizing at these higher levels now. Ripple effects continue to happen due to capacity movements, but we foresee these developments also to settle in March/April. 

Update February 2nd, 2024

The situation in the Red Sea remains volatile and so far, there has not been major improvements around navigation safety. We see ocean carriers continue to redirect ships to the longer Cape of Good Hope route and the military intervention in Yemen has increased the frequency of attacks on vessels, now also expanding the risk area to include the Gulf of Aden. 


70 additional vessels (or 1m TEU) are needed for the weekly services around the Cape. Because of this disruption we see 25% of sailings blanked and equipment shortages starting to show in many locations. 

Freight Rates

The capacity shortage drove the SCFI to a 16-month high. We expect rates to retain a big portion of their gains post Chinese New Year due to ongoing capacity and container equipment shortage.


Shippers should anticipate round Africa services becoming the norm for several months.

Update January 24th, 2024


Currently, we are observing a significant impact on departures from Asia to Europe, with approximately 40% to 50% of shipments missing in calendar weeks 6 and 7. This is primarily due to vessels that were diverted at the end of December not returning to Asia as scheduled. As a result, transit times have been extended, causing disruptions in the return supply of equipment to Asia.

These delays in equipment arrivals are anticipated to result in supply issues in the upcoming weeks, leading to a shortage of available equipment. Additionally, we expect to see port congestions and bottlenecks in the hinterland until new schedules are updated to accommodate the changing circumstances.

Frequently Asked Questions (Red Sea FAQ)

What is the outlook for rate development, especially after Chinese New Year?

Rates are expected to continue rising, albeit at a slower pace, leading up to the holiday. Following Chinese New Year, we can anticipate some stabilization in rates, which will depend on factors such as capacity utilization and demand.

As a result, adjustments to surcharges may be made accordingly. However, it is still too early to provide a definitive forecast at this moment. We will continue to monitor the situation closely and provide updates as necessary.

Do the increased rates apply to all routes, or specific routes and trade lanes?

We're experiencing a surge in rates on the Asia-Europe & Mediterranean routes as a result of detours around the Cape of Good Hope. Likewise, we're observing a similar upward trend for other Asia-bound and transatlantic routes.

If the situation remains as it is today, with no further escalation, when should shippers expect to see the peak of cost increases?

Carriers currently estimate that we may not see any easing of the situation until at least the second quarter. The signs suggest that the challenging conditions will persist for some time.

Is the cost impact of the additional fuel due to the longer transit time offset by the savings from not having to pay the Suez Canal toll?

Navigating around the Cape of Good Hope (COGH) incurs significantly higher costs compared to transiting through the Suez Canal. This increase is primarily due to elevated fuel expenses, as up to 40% more fuel is required to sail around COGH compared to the Suez route. Additionally, maintaining a weekly string necessitates more vessels, which further escalates operational costs.

What is the impact on the reliability of other trade lanes?

We're witnessing a surge in capacity on the Panama Canal, accompanied by a rising demand on the US West Coast. For Red Sea-bound cargo, it's necessary to offload at either Middle East or Mediterranean hubs in the northern Red Sea. This process involves transferring to smaller ships, which incurs additional costs.

How long are the delays related to the re-routing?

We're experiencing delays that add approximately 20 to 50% additional transit time. This translates to an extra 7-10 days for routes into Europe and about 10-14 days into the Mediterranean from Asia.

Which ports will be most impacted by congestions?

From a port operations viewpoint, we anticipate potential challenges in European ports. These might be impacted when multiple vessels arrive simultaneously to unload cargo and rapidly depart with equipment.

What is the impact on container supply? Anything that shippers need to plan with?

Given the current situation, space is indeed a valuable commodity. Continue managing according to historical booking patterns, but securing additional space in the Spot Markets is necessary to accommodate capacity needs.

Will the routing through the Cape of Good Hope remain as an alternative to the Suez Canal in the future?

Once the current crisis eases, circumnavigating the Cape won't be a cost-effective or time-efficient strategy, given the additional expenses and extended transit times it involves.

Will ships divert from the Red Sea through the Artic in the spring?

It's unlikely, as specialized vessels are required to navigate Arctic waters.

Is DHL China Rail a robust alternative with regards to routing, capacity, lead times and compliance (especially regarding the sanctions against Russia)?

DHL China Rail is fully compliant and thus, we're maintaining operations. Please note that no Russian companies or rail services are involved. However, capacity is being utilized rapidly.

When is DHL SeAir the most cost-effective option?

If current rates from Asia continue to climb ahead of the Chinese New Year, DHL SeAir could prove to be a beneficial option. The transit time and size of the cargo might also enhance cost-effectiveness under these conditions.

Will the Red Sea events have an impact on Air Freight?

We anticipate a potential surge in air freight demand from China as we approach the Chinese New Year and in response to developments in the Red Sea.

Update January 11th, 2024


Services to and from Europe, the Mediterranean, the Middle East, and Africa are currently experiencing disruptions. This is particularly significant for routes that rely on Mediterranean ports as crucial hubs. Additionally, sailings on the TP (Trans-Pacific) route are being impacted, as several shipping lines had recently begun utilizing this route to bypass congestion in the Panama Canal.

As of January 7th, a total of 354 vessels, carrying approximately 4.65 million TEUs (twenty-foot equivalent units), have been affected. This accounts for approximately 40% of the capacity from Asia to Europe and the US East Coast. Consequently, customers should anticipate delays ranging from 7 to 20 days.

Freight Rates

Shipping costs are increasing in significant trade routes for the foreseeable future. This trend is expected to persist at least until the Chinese New Year and possibly beyond. To address the rapid rate increases, we have decided to implement an Emergency Cost Recovery Surcharge (ECRS) immediately.

Carriers have introduced more than 50 surcharges across over 100 different trade routes. Additionally, certain additional services, such as Freetime, may be reduced as the focus shifts towards ensuring the prompt return of equipment.


The schedule reliability of shipments has been significantly impacted, causing a ripple effect across global trade. The limited capacity available is becoming a constraint, leading to increased rates in trade routes such as the Trans-Atlantic.

Furthermore, equipment issues are beginning to emerge and are expected to worsen. This is due to vessels not returning to Asia on time, resulting in a shortage of available equipment for future shipments.