The conflict in the Middle East
Thursday, 25 January 2024
Earlier this month we updated you on the conflict in the Middle East which has impacted logistics with regards to the distribution of goods from Asia to Northern Europe.Â
The attacks have resulted in the majority freight operators (estimated to be 90%) diverting cargo away from the region and via the Cape of Good Hope, adding between 10 and 14 days to transit time. The diversions, and subsequent availability of cargo vessels, is now impacting on logistics prices with transportation costs on the spot market increasing by nearly 200%.
Although diplomatic and military efforts are in place to resolve the challenges, it is anticipated that higher transportation costs and product availability will impact the sector beyond the first quarter of the year as freight rate levels will remain elevated.
At Harrison & Clough, we are well placed to mitigate the impact that this may have on our customers and have prepared the business for such an eventuality by holding higher levels of stock in our warehouses, giving our customers some protection against shortages. We will also maintain our next day delivery pledges.
The situation is likely to remain logistically challenging, however we have a team monitoring the situation and working with our suppliers, freight operators and customers to ensure that there is minimum disruption to your business. We will continue to keep you informed of any updates, however should you have any questions, please contact your business representative.
The attacks have resulted in the majority freight operators (estimated to be 90%) diverting cargo away from the region and via the Cape of Good Hope, adding between 10 and 14 days to transit time. The diversions, and subsequent availability of cargo vessels, is now impacting on logistics prices with transportation costs on the spot market increasing by nearly 200%.
Although diplomatic and military efforts are in place to resolve the challenges, it is anticipated that higher transportation costs and product availability will impact the sector beyond the first quarter of the year as freight rate levels will remain elevated.
At Harrison & Clough, we are well placed to mitigate the impact that this may have on our customers and have prepared the business for such an eventuality by holding higher levels of stock in our warehouses, giving our customers some protection against shortages. We will also maintain our next day delivery pledges.
The situation is likely to remain logistically challenging, however we have a team monitoring the situation and working with our suppliers, freight operators and customers to ensure that there is minimum disruption to your business. We will continue to keep you informed of any updates, however should you have any questions, please contact your business representative.