Thai exporters are being urged to promptly refine their export strategies given the escalating situation in the Red Sea that is affecting shipping costs and available vessel space while extending shipping duration.
Speaking after a meeting held yesterday with the Commerce Ministry, related agencies and shipping lines to assess the impact of the attacks on international cargo ships in the Red Sea, Chaichan Chareonsuk, chairman of the Thai National Shippers' Council said the Houthi attacks are driving up costs to ship goods to North Africa, the Middle East and the EU.
The uncertainty is leading to delays in goods delivery to customers, he said.
The International Chamber of Shipping said 20% of the world's container ships are now avoiding the Red Sea, using the much longer route around the southern tip of Africa instead.
According to Mr Chaichan, Thai exports affected by the attacks include automotive parts bound for Saudi Arabia, North Africa and Europe, as well as car tyres, food products and electronic components headed to Europe.
Thai exports to Europe comprise 7-8% of total shipments, making it a crucial market.
Sompol Tanadumrongsak, managing director of Fortune Parts Industry Plc, said shipping costs to the Red Sea have increased by 200-400%.
For shipping routes to Jeddah, Saudi Arabia, Aqaba, Jordan, and Sokhna, Egypt, the cost has increased to US$8,500 per 20-foot container, up from $1,500, he said.
For containers bound for Turkey, the cost has risen to $7,500 from $2,400 per container. For routes to Europe, the cost has tripled compared with the previous year, said Mr Sompol.
"Exporters and importers need to prepare in advance for container bookings and shipping schedules, ideally around one month ahead," he said.
"If the export goods are not time-sensitive, it is advisable to wait until the first weeks of February during the Chinese New Year holiday because freight costs are expected to decrease during that period, given the rush in activity occurring in China before the holiday."
Phusit Ratanakul Sereroengrit, director-general of the International Trade Promotion Department, said the Commerce Ministry requested shipping companies maintain their freight rates as promised.
He said the shipping companies have assured the ministry the pre-booked freight rates will be honored without adjustment, though this is subject to the discretion of their parent companies.
Regarding surcharge costs, the ministry asked shipping firms to make clear announcements to enable exporters to plan and negotiate with importers, said Mr Phusit.
In terms of collecting free time charges, shipping companies are urged to negotiate with port authorities to ensure a balanced approach, preventing congestion at the port and container circulation problems, he said.
"The ministry is sending a letter to shipping companies to communicate these concerns and request clarity on the announcement of surcharges," said Mr Phusit.
"These moves can facilitate exporters and importers in their planning of business operations."
