H&Z
H&Z Management Consulting - Consulting with head, heart and hand
29/01/2024

Ocean Freight Update January 24: Rates climbing due to Red Sea attacks plus recommended action

Due to recent attacks and ongoing disruption in the Red Sea, ocean freight rates are experiencing a significant week-on-week increase. To avoid being caught off guard and to stay commercially prepared, there are several important actions to consider.

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H&Z

January 2024 Ocean Freight Market Update: Navigating the Challenges of Red Sea Attacks and Persistent Shipping Disruptions

Ocean rates continue to climb due to the recent attacks and ongoing disruption in Red Sea, with rates climbing significantly week-on week. Key actions to make sure you don’t get caught out by these increases:
 

  • Current contract management is key to understand when current contracts are coming to an end, and when you will need to start engaging the market
     
  • Work with Shipping Lines and Freight Forwarders to break down and justify any surcharges and changes to shipping rates,• Review of service types. If you are shipping LCL, explore consolidation into FCL
     
  • As the Red Sea issues ease, or are resolved, deciding when to negotiate your rates is going to be key. Keep any immediate increases as a surcharge, as they are easy to remove when the situation eases
     
  • If you have to negotiate new rates in the next few months continue to monitor regional logistics news, but also challenge the shipping lines and freight forwarders to put in measures that will reduce/remove costs from agreed prices once normality returns to the shipping routes

 

 

These Red Sea issues are adding complexity to the Ocean Freight market and H&Z are helping its clients navigate through this situation and put in place clear transparent agreements that improve on current market pricing and also allow clients to move freight around the world in the most cost effective means, managing risk, price management and transparency.  

If you would like to explore how you can lower the cost of your logistics, please get in touch with our dedicated logistics and supply chain team. 

Neil Jordan

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Neil Jordan

Richard McIntosh

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Richard Mcintosh

To find out more about the Ocean Freight Red Sea situation, you can download the update here