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With no sign of the crisis in the Red Sea abating, a survey by Ti Insight has revealed the extent to which global shippers are taking steps to avoid delays involved in re-routing ships around the Cape of Good Hope. Almost two thirds of shippers taking part in the survey said that they had switched a proportion of their shipments away from sea freight services.

Of the various modal shift options available, the switch from sea to air was the most common choice (17.2%). Air cargo is the obvious choice for urgent shipments and this, combined with the Chinese New Year, is pushing up rates for the first time in months. Delays, shortage of shipping capacity and increasing sea freight rates are making air (and sea-air hybrid combinations) more attractive. he use of rail, either on its own or as part of a sea-rail hybrid solution, has also soared. Rail Bridge Cargo claimed that China-Europe rail route bookings had risen by 37% since the start of the crisis.  But the shift towards multi-modal solutions (air/sea combination and sea/land combination) was also significant – almost 20% in aggregate. This is due to the cost and time advantages of using a combination of air/sea and sea/land compared to a full shift to air. Dubai-Europe is a particularly popular sea-air lane, with rate platform Xeneta asserting that it was seeing double digit growth in the early part of 2024, a period which is traditionally weak.

Source: Ti Insight