Resilience and Perspectives on the Red Sea Crisis

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The Red Sea crisis, caused by Houthi attacks, diverts containerized goods around the Cape of Good Hope. Opinions vary on its impact, with Drewry, a shipping consultancy, suggesting the oversupply in the global market provides resilience to cope with disruptions. While initial dislocation raised spot rates, Drewry anticipates a softening of markets, with capacity back in operation after March/April. Diversions affect 30% of global container ship capacity, resulting in a 9% reduction. Drewry's supply-demand index sees a modest increase due to diversions, indicating a minimal impact on overall overcapacity. Unlike the COVID-era supply chain crisis, current demand is more moderate, and a surplus of ship capacity exists, with port congestion being a potential concern. In conclusion, the Red Sea crisis is influencing global containerized goods transportation, but perspectives differ on its severity.

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