January 24, 2024
Many of us will have picked up media reports about growing challenges faced in the Red Sea and the action both the UK and US Governments have taken to protect commercial shipping routes. The impact may feel a long way from promotional marketing, however, the commercial shipping vessels targeted by Houthi rebels as they travel through key shipping lanes in the lower Red Sea are carrying a vast amount of consumer goods destined for UK and Europe.
As an important shipping route, we are advised many shipping companies who use this route are now avoiding this area due to the escalation which means delays. We already know many merchandise companies are planning around this to ensure goods arrive on time as shipping by sea for some goods is now likely to take an extra few weeks.
We’ve been talking to the British Promotional Merchandise Association (BPMA) to see what impact we might see on branded promotional items the industry is using for campaigns.
Why the Red Sea is an important channel
The Red Sea, one of the world’s most densely packed shipping channels, lies south of the Suez canal, and is the most significant waterway connecting Europe to Asia and east Africa. About 12% of global trade passes through the Red Sea, including 30% of global container traffic. Billions of dollars of traded goods and supplies pass through the Red Sea every year, meaning that delays there can affect petrol prices, the availability of electronics and other aspects of global trade.
Prominent shipping companies including Maersk, Hapag-Lloyd, and MSC have decided not to use the Red Sea at this time. According to the Atlantic Council, a thinktank, seven out of the 10 biggest shipping companies by market share have suspended operations in the Red Sea.
Ships are being diverted around the Cape of Good Hope, on the southern tip of Africa, increasing their journey time by up to two to three weeks. As this is a politically-connected situation, it is unclear exactly when this may change. As a result, planning for extended delivery timing is advisable for goods coming from the Far East in particular.