The Red Sea crisis is still not easing and the waves of challenges are nowhere near over for US businesses.
The American Apparel & Footwear Association (AAFA) has sent US president Joe Biden a letter pleading for the US government to significantly increase its efforts to protect commercial shipping.
Locate2u has been keeping a close eye on the Red Sea crisis in recent months.
The importance of the Red Sea
The Red Sea is a crucial corridor connecting the Mediterranean Sea, the Indian Ocean, and beyond. Its strategic location gives shippers access to Europe, Asia, and Africa. The Red Sea route is the natural sailing route between these regions.
Rerouting vessels due to the crisis hasn’t made things easier for shippers, as this route increases transit times and costs.
“The cost of rerouting commercial goods around South Africa’s Cape of Good Hope has contributed greatly to inflation and high retail prices. Shipping costs have skyrocketed as the longer route adds two weeks and raises costs for personnel, fuel, insurance, and equipment,” reads the letter.
The AAFA highlights that equipment shortages arise as containers spend more time on ships than planned, causing delays and backlogs. This increases the risk of goods shortages waiting to be shipped. The rerouting costs are no longer sustainable, hurting the American economy, workers, and consumers.
Lingering port congestion plagues shippers
The organization also sent a letter to the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), highlighting that businesses are facing challenges around the world due to the Red Sea crisis.
This particular letter emphasizes the impact delays are having on business:
- Lingering port congestion: Three days of stoppages in early October caused major disruptions at ports, including Savannah, a key hub for apparel, footwear, and accessories on the East and Gulf coasts.
- Record rail delays: West Coast ports experienced two-year high rail dwell times as shippers diverted goods from East and Gulf coast ports.
- Ripple effects continue: Delays and congestion from October’s disruptions still impact supply chains across the country.
Red Sea crisis roundup: Spotlight on the logistics
The business world waited with bated breath to see what they would have to deal with throughout a busy holiday season in 2023.
The retail industry first saw industry player Target affected by the disruptions in supply due to shipments from India and Pakistan.
By January, shipping companies decided to avoid the Red Sea. The Cape of Good Hope route had become the alternative.
In the same month, Australia recalled a vessel carrying livestock for safety reasons.
Switching to airfreight to ease challenges
Shippers then started to consider airfreight to mitigate the challenges of the Red Sea disruptions.
In February, The British Chamber of Commerce (BCC) released a report on the scale of the disruptions caused by the crisis. This found that almost 37% of companies surveyed in the report say they have been impacted by the crisis.
In July, Maersk’s CEO Vincert Clerc warned that the months ahead are going to be tough for both carriers and businesses.
Fast forward to November and the supply chain is still being plagued by the logistics nightmare.
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About the author
Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.
