Red Sea Crisis Butterfly Effect: Beware of Empty Container Shortage!

In addition to causing delivery delays and freight rate spikes, the Red Sea crisis could trigger a chain reaction. It is expected that there will be a shortage of empty containers, which could have a profound impact on the supply chain during the Chinese New Year period.

A chief executive of Freight Right, said normal voyage cycles have almost doubled as ships need to circumnavigate the Cape of Good Hope. However, he believes rising freight rates and longer transit times will only have a short-term impact.

Flexport believes that the Red Sea crisis will trigger a series of chain reactions, especially in terms of containers. "Container shortages and port congestion are expected. A shortage of empty containers could hit Asian ports as early as mid-to-late January."

A chief executive of shipping consultancy Vespucci Maritime, warned that while we have enough containers, they may not be in the right locations.

Vessels within the Asian region will also face challenges with empty container availability. For example, ports such as Jebel Ali in the United Arab Emirates and Chennai in India rely heavily on container resources transported through the Suez Canal.

To ensure availability of empty containers and on-time shipments, Flexport recommends shippers book space four to six weeks before planned departure. Additionally, Flexport recommends incorporating extended lead times into inventory planning and planning for increased shipping costs. Shippers can consider alternative routes, modes and premium services, and increase communication with logistics providers to stay abreast of any updates.

Lars Jensen emphasized: “Under the current special circumstances, there is really no better response strategy except maintaining close contact with logistics suppliers.”

Due to the Red Sea crisis, and there is the peak shipping period around the Chinese Spring Festival, which has aggravated the impact of this situation. What's more, our adhesive products are chemicals, such as super glue, liquid silicone, hotmelt glue sticks, etc, which have more shipping restrictions, so the earlier the shipment, the better. No one is sure how the shipping and sea freight will develop.