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With no clear timeline for the resolution of the Red Sea crisis, carriers have extended their diversions to the Cape route with the number of containerships re-routed rising to  354 units for 4.65m teu or 16.4% of the fleet as at 7 January 2024. These diversions will result in an expected capacity shortfall of up to 40%  for departures from Asia to Europe and the US East Coast in weeks 4 to 6, with freight rates expected to surge further over the coming weeks.

The aggregate SCFI composite index has already risen by 97% since the beginning of December with room for further hikes in the weeks ahead. The delays have also affected the availability of containers returning to Asia, with new box production rising sharply since December while prices of new equipment has jumped by over 20% in the past month. The only relief will come from new vessel deliveries, with the run rate rising to over 250,000 teu a month and a full year delivery schedule of 3.2m teu due in 2024.

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80% of all containerships on Suez route have diverted to the Cape of Good Hope
The number of containerships that has been diverted from the Suez to the Cape route has reached 354 ships since 15 December 2023, accounting for 80% of all the ships moving between the Atlantic/Med basins and the Indian Ocean. The number will continue to grow over the coming week with most of the main carriers currently opting for the Cape route. Only CMA CGM and a small number of niche carriers operating in the Asia to East Med and Baltic markets that have continued to use the Suez route with reports emerging that some carriers have negotiated with Houthi forces in Yemen for safe passage through the Red Sea.

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