What impact will the suspension of the Red Sea have on global cargo transportation?

The Strait of Mandate Red Sea Suez Canal is a transportation hub connecting Asia, Africa, and Europe. As one of the busiest shipping routes in the world, about 12% of international trade needs to pass through here.

Since the outbreak of a new round of Palestinian Israeli conflict on October 7th, the Yemeni Hussai armed forces have launched missile and drone attacks on Israel on the grounds of supporting Palestine, and have continuously attacked ships associated with Israel in the Red Sea.

There have been frequent attacks on cargo ships in the waters near the Red Sea. In order to ensure the safety of crew members, multiple international shipping companies have successively announced the suspension of navigation in the Red Sea, including container shipping companies Maersk, Mediterranean Shipping, Herbert, Delta Shipping, Star, Evergreen Shipping, Yangming Shipping, COSCO Shipping, Orient Overseas, ONE, and HMM. As of December 20th, at least 13 shipowners have chosen to bypass the Cape of Good Hope in Africa.

According to statistics, the total capacity of shipping companies that have announced the suspension of operations/collection in the Red Sea accounts for 85.9% of the global total capacity.

Nowadays, major shipping giants avoiding the Red Sea will mean giving up entering the Mediterranean through the Suez Canal and instead bypassing the Cape of Good Hope in southwestern Africa. The detour around the Cape of Good Hope will greatly increase the sailing distance, and it is expected to take an additional 7000 to 10000 kilometers, with an additional 7-10 days.

The suspension of the Red Sea route is undoubtedly a huge impact on China's export and import business. To address this challenge, China needs to take a series of measures. Firstly, China needs to actively seek alternative routes to reduce its dependence on the Red Sea route. Secondly, China needs to strengthen cooperation with other trading partners to address potential trade issues. In addition, China can also reduce its dependence on foreign trade by strengthening the development of domestic trade.

In summary, the suspension of the Red Sea route by European shipping giants is a significant decision that will have a profound impact on the entire shipping industry. Although this decision has brought many problems, we also need to see the opportunities contained within it. In this era of change, we need to actively seek alternative solutions and take measures to address future challenges and opportunities.