An Update from Cleveland on the Red Sea Crisis

What is happening in the Red Sea?

The majority of our shipping containers are manufactured in China and are transported by shipping liner operators to the UK. These deliveries of new ‘one trip’ units usually take around six weeks to arrive, travelling from the Red Sea to the Mediterranean Sea via the Suez Canal.

As a consequence of the Israel-Hamas war, the end of 2023 saw a growing number of missile strikes and drone attacks by Houthi rebels aimed at vessels in the Red Sea.

In December, MSC and Maersk container ships were the subject of attacks, which has reinforced the importance of rerouting sea voyages as an evasive manoeuvre.

Shipping lines are now pausing this traditional route and diverting their journeys to travel via the Cape of Good Hope in South Africa, a necessary safety precaution which is extending the journey time of container vessels.

It’s difficult to ignore the impact of the Red Sea crisis on our shipping operations. In response to these terrible attacks, shipping lines are understandably acting on their heightened security concerns and are now rerouting as a precautionary measure. We are anticipating a 2-3 week delay in container deliveries into the UK, which creates a knock-on effect for our customers.

Our teams are working hard to update their customers on the situation when necessary, navigating these disruptions for optimal stock availability and pricing amidst the global economic challenges. Thankfully, as the UK’s largest container sales company, we typically have larger volumes of stock on the ground nationwide.

Andrew Thompson, Chief Executive Officer at Cleveland

How does this affect our container stock?

As container ships will be rerouted around the south of Africa rather than heading north through the Red Sea, transit times could jump by 30%. We are currently predicting that for our incoming stock of new shipping containers, we are likely to expect a 2-3 week delay as a conservative estimate. However, further delays are extremely likely in forthcoming months given the ongoing nature of the situation. 

Our industry plays a huge role in the strength of the global economy. The repercussions of the disruptions in the Red Sea means that the cost to ship goods around the world is increasing due to longer sailing times, higher freight costs and additional port charges.

Additionally, the delays of goods leaving China is escalating container demand which will impact the factories where they are manufactured. The fallout of this means we are likely to see less available production for the resale market.

Considering the significant uncertainty, we would highly recommend speaking to a member of the team regarding your requirements to ensure container availability, secured at the best price. The longer the situation continues, the greater the impact we will see to prices, stock availability and global demand.