Shipping crisis deepens as vessels reroute around Cape of Good Hope

In 2024, a crisis in the Red Sea forced ship operators to reroute vessels around the Cape of Good Hope, leading to longer shipping times and increased congestion at major ports globally. This crisis has severely affected logistics and shipping capacity, creating higher maritime container freight prices. The World Container Index showed a significant rise early in the year, with China's export container freight index increasing by nearly 60% compared to 2023. The extended transport times and elevated shipping costs are placing additional burdens on foreign trade enterprises, which adversely impacts the recovery of global trade. The situation worsens as the increased shipping costs are passed on to consumers, raising concerns about inflation in global markets. According to the United Nations Conference on Trade and Development, if freight rates continue to rise, global consumer prices could see an increase of 0.6% by 2025, further hindering the global economy’s recovery. The combination of tightened shipping supply and elevated costs serves as a stark warning, highlighting the risks and uncertainties in global trade logistics. In response, experts emphasize the need to accelerate the development of multiple logistics channels to mitigate the risks caused by the current crisis. Developing new maritime transport routes, including exploring Arctic shipping lanes, can shorten travel times significantly compared to traditional routes through the Malacca Strait and Suez Canal. There's also an urgency to strengthen economic and trade cooperation with cities along transportation routes and enhance multimodal transport options, such as sea-rail combined logistics. The importance of cross-border e-commerce in China's foreign trade has been on the rise, which necessitates the development of air logistics to meet the growing demands. As of 2023, cross-border e-commerce imports and exports accounted for 5.7% of China’s foreign trade, reflecting a steady increase over previous years. Thus, enhancing air logistics capacity for high-timeliness goods has become crucial for maintaining the growth and transformation of foreign trade and to keep pace with shifting market needs.