The pause that major shipping lines are taking regarding the route via the Red Sea will have a major impact on imports and exports from several continents. This is no different for India, that was just about to start the export of their grapes to Europe. According to Sagar Deore, director for Indian produce exporter Janki Freshyard Private Limited , this situation will have a major impact on their season.
“We are about to begin exports of Indian table grapes to Europe, the United Kingdom, and western markets, therefore the current disruption in shipments caused by the recent attack on one of the commercial vessels in the Red Sea area has obviously had a huge impact on Indian table grape shipments. The majority of the lines said that they had kept the ships at sea or that just a small number of ships had been rerouted via the Cape to ports in Europe. They might also alter the schedule for the ships that are supposed to travel the Red Sea route.”
This new route will add both time and costs for anyone trying to export their product, which makes a real difference when it comes to fresh produce, Deore explains: “A few logistics agents also mentioned that ships may begin taking the longer, Cape-based route to Europe from Asia, which will cost several hundred dollars more than the present rates and need an additional 10 to 15 days of travel time. Though we haven't heard anything official, they might soon begin charging for a ‘War Risk Surcharge’ as well.”
As of now, there are no delays for Janki in terms of shipments on the way, but there’s no way to avoid future delays, Deore states. “Fortunately, there are no delays or disruptions in our current shipping to South Asian ports. However, the current situation will undoubtedly affect our future shipments to European ports, and it will eventually affect the future arrival-departure schedule of the vessels, whether they are headed east or west.”
Remarkably, the exporter hasn’t received any official word on rerouting the vessels just yet: “Shipping companies will have to reroute the vessels via Cape if the current risk does not decrease in a timely manner; we have not yet received any official updates on this front. Given that the Suez Canal is one of the most significant and economical routes, liners traveling from Asia to European destinations will have little choice but to select the next available route. This will undoubtedly result in a significant increase in the sea freight rate and a further war tax on Asian exporters,” Deore concludes.
Amgad Nessem, Export Manager at Elteriak Farms, an Egyptian fruits exporter, describes gravity of the situation, "What is happening to the Red Sea is a crisis of major proportions that is paralyzing sea traffic. Egypt is now cut off from Asia, the Far East, and even the Gulf countries. It's very bad for Egypt, and it's likely to exacerbate the economic crisis."
He continues: "The large shipping companies have diverted their lines to Cape Verde, which increases our transit time by 14 days and thus increases transport costs by at least 30%. We have seen deliveries to our customers canceled due to the interruption of shipping lines. We understand that Yemen is targeting shipping companies with Israeli capital or ties. We continue to work with small companies to deliver to our customers, which have no problem transiting the Red Sea. However, we expect them to increase their prices as well giving the big demand."
Eslam Gelila, CEO of Gelila, an Egyptian fresh produce exporter, said, "Logistics are badly affected. We're no longer able to export to Asia, East Africa, or even the Gulf countries. The situation is unclear, we're waiting to see how the shipping companies will do, and the possibility of delivering via Cape Verde. Even Turkish and Spanish exporters, who rely on the Bab Almandab strait to reach Asia, also have this problem currently. On the other hand, our deliveries to Europe, Russia, and South America have not been disrupted and are going smoothly."
For more information:
Sagar Deore
Janki Freshyard Private Limited
Cell/WhatsApp: (+91) 913 024 1585
Email: export@jankiglobalexport.com
www.jankiglobalexport.com
Amgad Nessem
Elteriak Farms
Tel: +201 207 976 920
Email: amgad.nessem@elteriakfarms.com
www.elteriakfarms.com
Eslam Gelila
Gelila
Tel. +20 100 000 4540
Email: ceo@gelila-eg.com
www.gelila-eg.com