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How the red sea crisis impacts relocation

Published: Wednesday, January 31, 2024
Sirva Communications

What you need to know and key considerations 

Note: We recognize that the Red Sea Crisis and Panama Canal challenges are a fluid and constantly evolving situation but stay tuned as we provide ongoing updates.

Overall Situation

As widely reported, Houthi Rebels are conducting attacks on commercial vessels in the Bab al-Mandab Strait. This narrow water passage serves as the entry/exit point to the Red Sea. 

The attacks have escalated and additionally, the Rebels have forcefully boarded some ships, taking both the vessels and their crews hostage. The targets of these attacks have included container ships, tankers, and bulk carriers. It is worth noting that not all vessels have had any affiliation with Israel, nor were they transporting cargo to or from Israel.

As these attacks have become more indiscriminate, resulting in damage to several vessels, numerous shipping carriers have declared a temporary halt to sailing in the affected area.

What You Need to Know About the Crisis

Sirva shipments are routed across the globe and have changed drastically. With the ongoing low water level issues at the Panama Canal and unsafe transit through the Suez Canal due to the conflicts in the Red Sea, all major steamship lines have had to reroute around South America and Africa which is impacting transit times by 10-15 days. You should expect:

  • Two-to-three-week delays on all sea shipments. 
  • Higher freight costs due to the diversion. 
  • Possible demurrage/detention charges due to backed up ports from increased activity. 
  • Temporary living extensions may be required.

Shipping Delay Strategies and Recommendations 

We are expecting schedule disruptions, congestion, surcharges, and blank sailings as the industry adjusts to this new routing. There has been vessel bunching outside the Red Sea and delays due to longer transit times. Port and infrastructure congestion is being experienced at many destinations, as well as capacity and equipment shortages at origin ports which is causing costs to increase.

temp living for ee Consider offering additional temporary living accommodation at employees’ destination until their household goods shipment has arrived.  
shipment strategies for EE If a client offers both air and sea shipments, consider increasing the air shipment allowance.
Storage for EE Allow employees to store goods at the origin location for a period, with extra baggage or small air shipments of essential household goods. This can incur higher costs but may give employees the ability to sell their home if they need to be out quickly.  
Sirva Consultant for EE Employees should work closely with their relocation coordinators on the latest scheduling adjustments.
 

We will continue to keep you updated on this ongoing situation. If you have any questions, please do not hesitate to contact your Sirva representative, or email us at concierge@sirva.com. 

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