SINGAPORE: Freight forwarders in Singapore say their profits have fallen by about 20 per cent as the ongoing conflict in the Middle East pushes up fuel and freight costs.
In some cases, costs have doubled, while shipments are taking longer to reach their destinations as companies reroute cargo to avoid high-risk areas in the region.
Some industry players are also adjusting their operations, saying disruptions could continue.
One major impact has been the disruption to routes passing through the Suez Canal, a critical artery linking Asia and Europe, which typically handles about 12 per cent of global trade.
Since the Iran war began at the end of February, local freight forwarder Penanshin Air Express has begun diverting more shipments around the Cape of Good Hope in South Africa, rather than taking the shorter route through the canal.
This has added weeks to delivery times, the company’s executive director Bernard Chan told CNA.
A shipment from Europe to Singapore through the Suez Canal usually takes around 21 days, he said. Detouring around the African continent takes 45 to 55 days.
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In some cases, costs have doubled, while shipments are taking longer to reach their destinations as companies reroute cargo to avoid high-risk areas in the region.
Some industry players are also adjusting their operations, saying disruptions could continue.
LONGER ROUTES, HIGHER COSTS
One major impact has been the disruption to routes passing through the Suez Canal, a critical artery linking Asia and Europe, which typically handles about 12 per cent of global trade.
Since the Iran war began at the end of February, local freight forwarder Penanshin Air Express has begun diverting more shipments around the Cape of Good Hope in South Africa, rather than taking the shorter route through the canal.
This has added weeks to delivery times, the company’s executive director Bernard Chan told CNA.
A shipment from Europe to Singapore through the Suez Canal usually takes around 21 days, he said. Detouring around the African continent takes 45 to 55 days.
Continue reading...