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Shipping Giants Implement Surcharges Amidst Red Sea Disruption

Following attacks on vessels in the Red Sea, shipping behemoths Maersk and CMA CGM have decided to levy additional fees.

Shipping titans Maersk and CMA CGM have opted to impose additional charges following attacks on vessels in the Red Sea, prompting them to redirect ships and bypass the Suez Canal. 

Concerns over disruptions to global trade intensify as the companies adjust routes due to escalating security risks.

Extra Charges Address Longer Voyages:

To compensate for the longer voyages caused by rerouting ships around Africa instead of utilizing the Suez Canal, Maersk, and CMA CGM are introducing surcharges. 

These surcharges aim to cover the extended journey time, adding approximately 10 days to routes typically taking 27 days from China to northern Europe.

Impact on Global Trade and Automakers:

The shift in shipping routes is causing ripples across industries, with Chinese automaker Geely expressing concerns about delays affecting their European electric vehicle sales. 

The redirection of vessels is anticipated to disrupt automotive exports from China to Europe, impacting sales due to delivery delays.

Despite the announcement of a multinational force by the United States to patrol the Red Sea, specifics remain undisclosed. Shipping companies continue to avoid the zone, citing ongoing risks and opting for alternative routes.

Impact on Logistics and Recommendations:

Logistics firm CH Robinson Worldwide has redirected over 25 vessels to southern Africa due to the ongoing war risks in the Red Sea and other challenges like drought in the Panama Canal. 

It advises clients to expect cancellations and rate increases in the coming months, urging advanced bookings to secure vessel space.

Maersk specifies additional charges, with a standard 20-foot container from China to Northern Europe facing a $700 surcharge of $200 for transit disruption and $500 for peak season surcharge. 

CMA CGM also details surcharges, amounting to $325 and $500 per 20-foot container on specific routes due to rerouting.

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