Red Sea Crisis 2023: Navigating the Impact on Global Shipping and Cosmetic Packaging Supply Chains

On December 3, 2023, a U.S. Navy ship and several merchant vessels were attacked in the Red Sea. The escalating conflict led to the suspension of Red Sea transportation by the four major shipping giants, posing a threat of closure to the Suez Canal, a major artery of maritime trade. This situation increased the risk of rerouting sea trade that needs to pass through the Suez Canal, making cargo transportation more expensive and disrupting supply chains due to unpredictable delays. On December 18, 2023, following intensified attacks on merchant ships by Houthi forces, oil and gas giant BP announced the suspension of all tanker transits through the Red Sea. This development is perhaps the most clear indication to date of the attacks disrupting energy transportation, with European benchmark natural gas prices momentarily surging by 7.9% and Brent crude futures also rising.

What Impact Does the Red Sea Merchant Ship Attack Have on Shipping?

The attack on merchant vessels in the Red Sea impacts shipping in various ways. Oil and gas can be rerouted via longer routes, such as around the Cape of Good Hope, adding an extra 10 days to the Europe-Asia route compared to passing through the Suez Canal. The freight costs for oil and gas are set to climb. Since November 19, 55 cargo ships have abandoned their original plans to transit the Suez Canal and have instead rerouted around the Cape of Good Hope at the southern tip of Africa. This detour adds an extra 9000 kilometers and 7 to 14 days to the journey.


In Summary,the current 7-14 day increase in travel time due to rerouting around the Cape of Good Hope instead of the Suez Canal may be temporary. However, the choice to reroute from the Panama Canal to the Suez Canal might be the only option for the next six months. This means an additional 7 days at sea for routes to the East Coast of the United States, with the total port-to-port journey taking about 45 days. Clients are advised to adjust their time expectations accordingly.