Houthi rebels have successfully attacked several container vessels in the Bab al-Mandeb Strait, forcing major carriers to suspend or reroute operations. The attacks have:
- Affected 262 container vessels in the area, causing the majority of them to reroute.
- Led to a 61% decline in vessel volume through the Suez Canal, a critical passage for supply chain and commerce that sees 30% of global container traffic and 12% of global trade pass through i annually.
- Extended transit times by 7-20 days according to project44’s AI-powered ETAs, affecting a wide array of industries and goods.
Carriers such as Hapag-Lloyd, MSC, and Evergreen have temporarily suspended operations in the Red Sea. Maersk had paused but then resumed operations in the Red Sea until the Maersk Hangzhou container ship was attacked on December 31st. In response Maersk again paused operations in the Red Sea for the “foreseeable future.” Oil giant BP has also suspended operations in the Red Sea.
The downstream effects of these rerouted and drifting ships and the mass reroutes will likely cause stockouts in the month of February. The additional lead time was not scheduled for retail inventory, so following the peak season, inventory depletion is likely. the mass reroutes will likely cause stockouts. Companies who choose to air freight products or source from more expensive suppliers will have to pass that cost to customers or it will affect their earnings.
project44’s Data Insights reports pull data directly from our high-velocity supply chain platform to provide an overview of supply chain trends and specific insights on how this crisis is affecting vessels, lanes, ports and overall performance. This data is accessible to our customers – some of the world’s largest brands – in real time. But to truly help our customers navigate this crisis, we needed to go deeper and be more specific.
Get the latest on how container vessels are affected by tensions in the Red Sea. Follow Supply Chain Insights, powered by project44 proprietary data.
Within our high-velocity supply chain platform, Movement, our customers can access unique insights into how their shipments and orders are affected that they can’t get anywhere else. Customers can access customized dashboards that make it easy to understand which vessels are rerouting to avoid the Red Sea, which vessels are sailing through the Bab al-Mandeb Strait, and which vessels are dwelling in the Red Sea or surrounding areas.
Each customer receives a customized notification identifying how many bookings, bills of lading, or containers on vessels are being rerouted due to the Red Sea incident with a CTA to their unique view.
This view is saved and shareable so that anyone else in the organization can access it. From there, customers can view which specific shipments, and their associated orders are affected. This view includes an updated ETA, route information, additional identifiers, related shipments and orders with an updated route view that includes timestamps for each milestone. This can also be viewed in a map format with each milestone and the end destination clearly marked.
As new information on the rerouting vessels comes available, our AI-powered ETAs dynamically update to improve accuracy and provide a notification to customers.
Our customers greatly value the insights they can access in our platform. In addition to downstream inventory management and demurrage prevention, some customers are using our highly accurate data to challenge their providers about the delays, with project44’s AI-powered ETAs initiating the investigation for our customers. In many instances they have found that shipping lines have not communicated with their forwarders, making project44’s data the source of truth and accuracy in a challenging and confusing time for supply chains.
How We Do It
Our datasets of container journeys and vessel locations enable real-time monitoring of exceptions. We then create filters for our customers to view these insights. These specific dashboards are crafted by developing queries that monitor all vessels’ locations and pairing this data with shipment information. This process helps isolate vessels and determine if they are an exception, such as rerouting.
We are updating the list of affected vessels daily, using the queries developed against our real-time dataset. Our engineers and AI-powered platform are monitoring the situation, ensuring that Estimated Times of Arrival (ETAs) are kept updated as the situation evolves.
How does using a high-velocity platform like Movement help supply chain professionals?
Supply chain professionals require real-time visibility and insights into disruptions to enable businesses to predict and minimize the impacts of delays. The importance of such capabilities is highlighted during crises, emphasizing the need for advanced supply chain technology like project44 to enhance resilience.
This goes beyond simple tracking; visibility provides detailed information about shipments, including rerouting and estimated impacts on transit times, which is crucial for effective inventory planning. For instance, tracking merely locates the vessel, perhaps in the Red Sea surrounding areas, while visibility provides comprehensive data about the affected shipment, its rerouting (possibly around the Cape of Good Hope), and the subsequent effects on transit times.
Such detailed information aids in optimizing inventory planning by offering insights into vessels navigating the strait, rerouting movements, and dwell times, along with accurate Estimated Time of Arrivals (ETAs) for each vessel. With this visibility data, business leaders can effectively reroute shipments to avoid risks, strategize more efficient new shipping lines, and communicate transparently with customers about any delays and expected delivery times.
The importance of real-time visibility
Real-time visibility is crucial for supply chain professionals to predict and minimize the impacts of delays. Advanced technology platforms like Movement provide the necessary tools to make supply chains more resilient, enabling businesses to reroute shipments, strategize shipping lines, and communicate transparently about delays and delivery expectations.
Need a better way to respond to disruptions in the global supply chain? Request a demo today. https://www.project44.com/