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It’s impossible to overlook the ongoing crisis in the Middle East. The Red Sed—a significant artery in the worldwide shipping network—is currently caught in the crossfire of geopolitical tensions. This crisis is causing more than just political ripples; it’s amplifying delays in shipping and escalating the cost of shipping containers.   

 

Will this crisis cause global issues like we experienced during the pandemic? Our team at A American Container explores what to know.  

 

Key Takeaways: 

 

  • Freight rates and shipment delays have already increased due to the fear of unrest along the main Middle Eastern trade route. 
  • Supply chains are being disrupted since the Suez Canal handles 30% of the world’s container commerce.  
  • The crisis is driving up transportation costs, which is why some routes, especially those from Asia to Europe, are seeing price increases of almost five times.  
  • Depending on how long the crisis is, higher shipping expenses may eventually trickle down to the price of imports.  

 

containers stacked on cargo ship

How the Middle East Crisis Impacts Global Shipping 

The importance of the Suez Canal cannot be underemphasized. This strategic waterway is a vital link between Asia and Europe. The Red Sea shipping crisis, a result of Houthi rebel attacks on cargo ships and tankers, has already ricocheted through global supply chains, posing challenges for the global shipping community.  

 

Sea freight, an industry cornerstone, is experiencing an unprecedented rise in costs. 

 

Due to the tension in the area, many companies are detouring ships to the Cape of Good Hope. But this isn’t a simple sidestep—it can add two weeks to typical shipping schedules, increasing overall costs worldwide. 

 

The ripple effect is hitting North America as well. The Panama Canal, another major shipping route, is witnessing reduced capacity, impacting supply chains across the continent.  

 

Inflationary Concerns 

 

The escalating situation in the Middle East is predicted to significantly drive up the cost of sea freight, a key link in the supply chain of countless businesses.  

 

Due to the increasing shipping costs, the price of goods is anticipated to spike accordingly, causing anxieties over enterprise survival; particularly those with slimming margins. Even with the unknown yet imminent U.S. elections playing into this puzzle, the predominant threat resides in these ongoing disruptions that could potentially strain both enterprises and consumers.  

 

This turbulence results in short-term mismatches between supply and demand—an unpleasant setback for retailers who rely massively on sea freight. It’s not unthinkable that these heightened expenses get transferred down to consumers, pushing inflation upward.  

 

As events progress, experts are forecasting that the shipping costs will likely remain elevated for some time. This prediction, coupled with the eventual hit to consumer markets in subsequent months, points towards a likely surge in inflation. More so, consumer goods, including toys, household appliances, and apparel, will bear the brunt of this impact. 

 

cargo ship stacked with containers

How Does the Crisis Impact Shipping Container Availability? 

 

As a result of the crisis, there have been reports of container shortages at major ports, such as the Ningbo-Zhoushan port in China. The persistent diversions via lengthier routes demand more shipping capacity, which causes a shortfall in available containers, exacerbating the existing supply chain cleavage.  

 

Interestingly, an excess global supply of container ships might lead to lower shipping rates once the issue is resolved. However, meanwhile, containers’ availability for shipping finished and semi-finished consumer goods is greatly impacted. 

 

We currently have a good amount of container grades and sizes in stock at our lot in Tampa, so please reach out to us if you need a specific container for your project.  

 

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cargo container ship at sea

A American Container – Your Reliable Source for On-Site Storage  

 

The ongoing Red Sea crisis has undoubtedly caused disruptions in global trade and is likely to impact the availability of shipping containers. As such, we encourage our customers to contact us directly to inquire about our current stock levels and any possible delays in delivery times.  

 

Call us today to ensure your shipping container needs are met amidst this evolving crisis at 813-640-1911 or 813-945-9521! 

 

 

 

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