Freight News, Sea
Red Sea attacks raise global emissions and lead times
[ January 17, 2025 // Chris Lewis ]The Red Sea crisis created an extra 35.7 million tonnes of CO2 emissions in the past year, according to supply chain management consultancy Inverto, part of Boston Consulting Group.
Ships were forced to sail around Africa to avoid the risk of being attacked by the Houthi rebels, equivalent to the annual emissions of 7.8 million cars.
Some 1,000 fewer ships per month have passed through the Suez Canal in the past year, increasing costs markedly. While 2,133 ships passed through the canal in September 2023, this fell to just 999 in September 2024.
Inverto managing director, Patrick Lepperhoff, said: “The impact on the environment of Red Sea disruption shouldn’t be underestimated. Cargo ships are large emitters of CO2 and this is forcing them to travel thousands of extra miles to reach Europe.”
The crisis in the Red Sea has also increased voyage times from Asia to Europe by around 30%,d effectively reducing capacity in.
Delays have sharply impacted businesses that operate on a ‘just in time’ basis, forcing many to carry more inventory as insurance against further holdups in delivery of key components. This has knock-on effects on their capital efficiency, with greater value tied up in unused stock rather than in use elsewhere in the business.
However, said Lepperhoff,: “There may be light at the end of the tunnel for businesses that have been affected by the crisis in the Red Sea. The ceasefire deal between Israel and Hamas, if it holds, may bring greater stability to the region and allow more shipping to return to the Red Sea and Suez Canal.”
He added that that while price increases due to shipping delays have so far been relatively limited, they are impacting businesses seeking to deliver products to the US due to the potential introduction of tariffs. Extended lead times could pose two distinct challenges for businesses: delays and operational issues and an additional increase in costs due to increased shipping rates and tariffs if they are introduced.”
“With the elevated volume of goods being imported into the US at present, shipping costs are spiking for a lot of businesses.”
Tags: Inverto