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Adverse impact of Red Sea diversions on European exports

European exporters face cold chain conundrum

Since December, when carriers started re-routing Asia - Europe services via the Cape of Good Hope, European exporters have encountered challenges in maintaining their market share in the Middle East and India due to the preference for shorter supply chains by customers in these regions. Easyfresh, a provider of reefer logistics, highlighted in its May newsletter the adverse impact of these Red Sea diversions on European exports, citing a report from Maritime Strategies International (MSI) to support this assertion.

MSI's analysis revealed a significant shift in trade dynamics, with the Far East-Middle East/India trade volume expanding by 34.5% year-on-year in January, contrasting with a decline in European exports to these regions. The report pointed out that this trade growth has led to a substantial increase in container volumes from the Far East, while European exports have seen a notable decrease. MSI attributed the downturn in European exports to the diversions around the Cape of Good Hope, which have prompted Middle Eastern and Indian importers to seek alternatives to European sources, resulting in increased imports from other regions.

Despite the challenges in the containerized freight sector, the reefer cargo segment is experiencing a different trajectory. Drewry Shipping Consultants have observed a positive outlook for the reefer sector, expecting a growth in seaborne reefer volumes and a continuation of rate declines. This optimism is supported by healthy crop yields in the Southern Hemisphere, indicating a potential rebound for the reefer trade after two years of declines.


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