On Friday, shipping giants A.P. Møller – Mærsk A/S (Maersk) and Hapag-Lloyd stopped all container ship travel in the Red Sea. The following day, Italian-Swiss-based Mediterranean Shipping Company and French-based CMA CGM followed suit.

This means that four major shipping companies are now no longer doing business in the Red Sea, which plays a critical role in the global economy. The Red Sea’s connection to the Mediterranean Sea and the way it allows for easy vessel travel between Asia and Europe makes it one of the most heavily traveled waterways in the world.

Problems began when Iran-backed Houthis in Yemen started firing missiles and drone attacks at commercial vessels in the Red Sea in retaliation against Israel for its Gaza operation, as well as against the United States and other Western countries that back Israel.

There have now been four separate missile and drone attacks near the strategic Bab al-Mandab strait, which separates Yemen and Djibouti at the south end of the Red Sea next to the Gulf of Aden.

(Related: The world’s second-largest electronic components manufacturer has announced a 20-week delay for “engineered-to-order” [ETO] components in yet another global supply chain disruption.)

10 percent of global trade disrupted by Red Sea conflict

Roughly 10 percent of the world’s international trade occurs in the Red Sea. Each year, some $2.4 trillion worth of trade passes through its waters, which makes these vessel cancellations a major news item in terms of the global economy.

“We are deeply concerned about the highly escalated security situation in the southern Red Sea and Gulf of Aden,” reads a statement from Maersk. “The recent attacks on commercial vessels in the area are alarming and pose a significant threat to the safety and security of seafarers.”

Nils Haupt, a spokesman for Hapag-Lloyd, issued a statement of his own indicating that container ships are currently drifting outside the straight as they await further instructions. Some shipping companies have already completely rerouted their vessels around the Cape of Good Hope to avoid the conflict area.

Also over the weekend, U.S. Central Command tweeted on X (formerly Twitter) that the Burke-class guided-missile destroyer USS CARNEY shot down 14 Houthi drones in the Red Sea.

The Cape of Good Hope, by the way, is located at the very southern tip of South Africa. To reroute there instead of going through the Red Sea adds thousands of miles of extra travel for commercial vessels, which now have a lot further to go before reaching their destination.

Credit Suisse strategist Zoltan Pozsar warned earlier this year that the collapsing old world order would create conflict in international waters that will require intervention by militaries around the world. De-globalization seems to be the name of the game as nations of the world move back towards nationalism.

“I suspect the Iranians have armed the Houthis with some serious anti-ship missiles and there is a fear of embarrassment if a Navy ship is sunk,” one commenter wrote on a story about the Red Sea crisis. “The gayest Navy in the world.”

“The U.S. is itching to go at Iran,” suggested another. “No doubt the false flag will come soon enough, just as soon as Israel has mopped up the Gaza Strip. But ‘wars’ are not about winning; they are about killing our young and making the rich richer.”

Another noted that a lot of the commercial vessel traffic that goes through the Red Sea is bound for Europe, which is likely to see more supply chain problems emerge out of this.

Sources for this article include:

• ZeroHedge.com
• NaturalNews.com

The number of package flights operated by both FedEx Express and UPS “significantly declined month over month in July,” according to Yahoo! Finance. This shows just how far the overall air cargo market has sunk since the spring of 2022 and the effect of efficiency initiatives the companies have undertaken in response to lower express volumes.

Since the spring of 2022, the overall cargo market has been waning. And the shipping industry’s response thus far has been to impose new efficiency initiatives to try to lower costs and accommodate smaller express volumes, according to a report by Natural News. 

FedEx (NYSE: FDX) flew 9% fewer domestic flights last month than in June following small sequential gains the prior two months, with year-over-year flight activity down 14%, according to an analysis by investment bank Morgan Stanley. The year-over-year decline in UPS’ flight activity accelerated to 13% from 10% in June. UPS (NYSE: UPS) reduced July flights by 14% from June. Flight activity in May and June, by comparison, was relatively stable. –Yahoo! Finance

FedEx and UPS have both already declared they are reducing flight activity to make up for the lower volumes in parcel shipments.  FedEx is also streamlining its air infrastructure as part of a “multiyear effort to take out structural costs and improve profit margins.”

Morgan Stanley only tracks domestic flights for express carriers, and the data show the difference in performance at Amazon as well. Amazon, which has slowed its private cargo airline’s torrid pace of growth but hasn’t made any large-scale adjustments to the fleet, has seen flight activity drop.  Amazon Air dipped 2% month over month in July after being flat in June. Compared to last year, Amazon’s flight count actually increased 16%, three points better than in June.

This could be another sign of the crumbling economic state we find ourselves in.

Article cross-posted from SHTF Plan.

Because the writing is on the wall concerning the use of earth-based fuels like oil and gasoline – the climate change brigade wants these made obsolete – the owners of tankers that use such products are holding out on ordering new ships until it becomes clear the direction the “clean” energy industry is going to take.

“To decarbonize shipping, you either need an onboard carbon-capture system (which doesn’t exist yet) or to build new vessels that burn something other than fuel oil,” reported Greg Miller, writing for Freight Waves.

“The regulations on this new fuel haven’t been written yet. So, why would tanker owners in the business of making money accept the residual-value risk of ordering ships that could be prematurely obsolete after the rules are written? … The answer is: They haven’t and they won’t. There is now a historically low number of crude and product tankers on order.”

(Related: Check out our earlier coverage about the dismal state of the American food supply chain due to covid.)

Between climate hysteria and the residual fallout from covid, global shipping and supply chains are screeching to a halt

The situation is almost as severe on the product tanker side, the orderbook-to-fleet ratio of which has cratered to just 6.1 percent. And once again, it is because nobody wants to order new ships that rely on fuel technologies that are slated for tougher regulations.

“We are now seeing what happens when you go several years without investing [in new capacity],” said Jefferies analyst Omar Nokta about the dire situation.

Crude and product tanker owners only just recently started making money again after several dismal years of covid-induced supply chain failures, with 2020 and 2021 being the two worst years for the industry in 30 years.

“There is a two- to three-year lag between when an order is placed and when a new tanker is delivered,” Miller further explained about how the industry typically works. “These assets last 20-25 years. Thus, a newbuild ordered today will likely be in service in 2050.”

“If the world is actually decarbonizing and shifting away from consumption of dirty fossil fuels, what are tankers ordered today going to carry in the latter years of their life spans?”

The answer, of course, is that they will potentially carry nothing, hence why nobody is placing any new orders. In essence, the global shipping industry appears to be screeching to a halt, both due to climate hysteria and covid hysteria, which together have decimated both the tanker industry and global supply chains at large.

According to Bob Burke, CEO of Ridgebury Tankers, the overall lack of tank orders has nothing to do with capital discipline, which does not even exist in a market like this.

“It’s just not in our own best interest to order expensive ships with uncertainty over propulsion systems,” he said.

“For a ship that will be delivered two and a half years from now, at historically high prices, with a capital drag until delivery and when you don’t know whether the propulsion system is going to last very long, it is really hard for a shipowner to go out and take a flier on something like that without a charter from an oil company.”

The only people currently placing orders for new tankers either have some kind of tax incentive to do so or they are receiving backing from a longer-term charter, “typically for a dual-fuel design,” added Maersk Tankers CEO Christian Ingerslev.

“Otherwise, there’s nothing being ordered.”

More related news can be found at GreenTyranny.news.

Sources for this article include:

• FreightWaves.com
• NaturalNews.com
• NATURAL NEWS