Yemen's Iran-backed Houthi rebels have significantly impacted global trade and pose a serious threat to the smooth flow of goods from Asia to Europe. With the growing concerns among customers about the delivery status of oxygen lance pipe shipments, we aim to reduce the anxiety by offering timely updates, suggesting viable solutions, and expressing our insights on this urgent matter through this blog post.
Current Situation in the Red Sea Region
- On December 11th, the Houthi rebels, backed by Iran, attacked commercial ships entering the southern part of the Red Sea.
- More than 100 commercial ships of many leading shipping companies such as Maersk, Hapag-Lloyd, MSC, CMA CGM, etc. have to redirect their operations and adjust their routes because they could not pass through the Suez Canal, the shortest maritime route between Asia and Europe.
- This strategic adjustment disrupt the usual flow of maritime trade, warranting additional costs and longer journey. The prices of oil and war insurance premiums have also soared significantly during these days. On December 20th, Brent crude oil futures, the global benchmark, climbed 1.2% to surpass $80, after dipping below $74 just a week prior.
- In particular, this unexpected reroute of vessels results in an additional 6,000 nautical miles to the usual voyage from Asia to Europe, potentially causing delays of up to three or four weeks in the delivery of products.
- Here's we show all about the status quo of Houthi attacks, the preventive measures from shipping lines, and finally Daiwa Lance's thoughts to help you catch the glimpse of what's happening around you.
Preventive Measures from Shipping Companies In Response To Houthi Attacks
Given the escalating threats of attacks on commercial ships in the Red Sea and the Gulf of Aden, the shipping companies safeguard the well-being of their crews, vessels, and cargo by enacting immediate response protocols as follows:
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In a precautionary measure, the shipping companies will avoid the route of Suez Canal and Red Sea. Instead, their ships will be redirected either around the Cape of Good Hope or anchored safely.
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Once the region is deemed secure for the crews and cargo, the shipping companies will revert to utilizing Suez Canal as usual.
- Anticipated disruptions resulting from the reroute of vessels by shipping companies are projected to lead to delivery delays of approximately three to four weeks for products.
Final Thoughts from Daiwa Lance for Shipment to Europe
In an attempt to reduce the risks and worries for European customers regarding the bundles of Daiwa Lance's products including Calorized Lance Pipe, Thermic Lance, SC Lance, Ceramic Coated Lance Pipe, Aluminum Lance Pipe, Color Pipe and HT Pipe, we implement the following action:- Provide timely updates about the situation, expected delays, and alternative arrangements from the shipping companies.
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Maintain open channels of communication and be available to make real-time decisions based on evolving circumstances.
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Closely work with customers to conduct a comprehensive risk assessment for evaluating the potential threats and vulnerabilities associated with shipping routes, then implement appropriate risk mitigation strategies.
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Conclusion
To our valued customers, rest assured that both Daiwa Lance and our partnered shipping companies have adeptly navigated the challenges presented by recent events in the Red Sea. Your shipments, including the diverse range of our products, are being managed with utmost care and diligence. Should you have any queries or need further assurance, please click below link and fill in the form to reach out directly to Daiwa Lance. Your trust is paramount, and we remain committed to delivering excellence, even in challenging times.
