ARCON Container Plans Ahead with Regional Focus to Bypass Red Sea Ports

Impact on Global Supply Chains
The Red Sea crisis has significantly impacted global supply chains, affecting the efficiency of transporting goods. Increased transit times due to rerouting around Africa add about 30% more time to journeys, causing delays. Higher shipping costs have resulted from these disruptions, impacting businesses and consumers. The ongoing security situation and crisis have introduced uncertainties and disruptions, making planning and smooth operations more challenging. These factors affect companies by causing delays in receiving or delivering goods, leading to inefficient supply chains, higher investment in inventory and working capital, and forcing companies to look for new suppliers, if possible.
Addressing Challenges
To mitigate these disruptions, several challenges must be addressed, including increased shipping rates, longer transit times, higher insurance premiums due to elevated freight costs, and a lack of shipping space and container availability. While these challenges are common across the logistics industry, we are taking specific steps: planning well in advance, focusing on nearby regions that do not require crossing Red Sea ports, and working with multiple shipping lines and vendors.
Impact on Logistics Providers and Customers
As a logistics player and NVOCC operator, the Red Sea crisis has led to increased freight rates, which is beneficial for logistics service providers. However, our customers with significant import and export orders face substantial cost increases and must take various steps to control their expenses. Currently, shippers have limited options but to accept these higher costs, as they affect the entire industry and its competitors.
Risk Management and Route Diversification
To avoid the risks associated with the Red Sea ports, we have considered not loading cargo on ships sailing via these ports. While insurance is an option, it comes at a very high cost. Although we are diversifying our cargo routes, this is challenging given the scale of our operations. The Cape of Good Hope route is significantly longer, making it difficult to avoid the Suez Canal for an extended period.