How Foreign Trade Companies face the Red Sea Crisis?

Red Sea Drisis, Shipping costs skyrocketing?

Is it difficult to sell products in the destination country?

Do you still dare to continue importing and exporting your goods?

What's the Red Sea Drisis?

The Red Sea route accounts for 11% of global trade route traffic.

From October 19, 2023, the Houthi movement in Yemen launched a series of attacks, causing most shipping companies to abandon the Red Sea route and bypass routes such as the Cape of Good Hope in order to avoid risks.

The disruption of the Red Sea route has led to skyrocketing international cargo transportation costs and geopolitical tensions, which have had a huge impact on global trade and supply chains.

Globalwits Bill of lading data

What real impact does Red Sea Drisis have on global supply chains?

For the market, the increase in voyage distances directly caused products to skyrocket in shipping costs and longer transportation times.

Increased arrival costs lead to slower sales of goods in destination markets As a result, many importers and exporters wanted to avoid Risk, took a wait-and-see action and stopped the import and export of goods.

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But is this really the case ?  No!

The fact is that many export companies have become busier, because while many risk-averse companies stopped importing and exporting, actively gave up their share of the target market, many far-sighted companies saw opportunities and increased exports to destination markets.

Because they knew that the sales price of goods would be Marketing is driven by supply and demand, especially consumables. When all the spot goods are sold out on the market, only they have the products and exclusive pricing power. 

COVID-19’s reordering of company rankings in different markets is a classic case. Every crisis is an opportunity to re-rank market share.

border ship patrols the sea. maritime border of Russia and Ukraine

But you also ask that I'm a small and medium-sized enterprise and cannot resist risks.  How should we face the crisis at this time?

At this time, one the one hand, we can also use customs data to continuously monitor our previous markets, maintain contact with customers.

And monitor which markets our peers are exporting to and which markets are relatively weak.

On the other hand, we can accurately find relevant markets suitable for land transportation through customs data and carry out long-term development.

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