Countless commentaries and extensive media coverage have since followed on the topic.
One notable report from CNBC suggests shipping lines will be the "winner" by abandoning the Suez by allowing deployment of extra vessel capacity, saving US$500-600K "toll" per vessel, and charging thousands more per TEU. As well as again impacting shippers (exporters / importers) with higher prices, the report suggests the sleeper in terms of impacts is on ports - refer to the video clip available HERE
This position largely aligns with a report by MDS Transmodal prepared on behalf of the Global Shippers Forum (GSF) – extract below:
"If we simply take the extra demand for ship assets, we arrive at a figure of around an extra 2.5m TEU of capacity, which amounts to around 9% of total global fully cellular fleet capacity. This is substantial but given that freight volumes have grown so little over the last 2-3 years while the fleet has been expanding this might be an impact that can be absorbed and competition between lines will keep rates in check.
However, the Suez route attracts a very high proportion of the world's largest ships. If we model the extension of each service via the Cape and then consider just ships larger than 10,000 TEU we find that 19% more shipping capacity of this class will be required. The obvious impact would be that some smaller ships will need to be deployed (with higher unit costs per sea mile) to meet this deficit, which may impact rates.
Perhaps more serious, however, could be the impact on ports.
On the one hand, some ports will suddenly find themselves at a severe disadvantage because instead of being on the main global maritime highway they will find themselves almost cut off. While the current security emergency may be resolved quite shortly, there maybe a loss of confidence in the current routeing strategies and the transhipment networks that underpin them. Essentially, the issue of resilience arises again. The impact on Suez Canal revenues will be serious.
On the other hand, there may well be short-term supply chain management issues as container ships delayed from Asia have then to deliver containers to ports otherwise 'cut-off' and which have not passed via transhipment ports where containers would have been exchanged 'en-route', again affecting resilience.
How the liner sector deals with such a major shock will be a further test of its relationship with its shipper clients."
COMMERCIAL NOTICES
21 DEC 2023 -TT Club : with effect from 1 January 2024 the Club has updated the list of excluded areas under its covers for War Risks, Piracy, Strikes Riots & Terrorist Risks- refer HERE
21 DEC 2023 - Maersk : introduction of a Transit Disruption Surcharge (TDS), Peak Season Surcharge (PSS) and Emergency Contingency Surcharge (ECS) for all cargo on vessels affected by the disruptions around the Red Sea / Gulf of Aden - refer HERE.
This is a significant development. Following events witnessed during the pandemic, there is an expectation that other shipping lines will follow in coming days with similar charges and / or increases in freight rates - updates will be posted at www.FTAlliance.com.au
HAPAG LLOYD : Here's a live ticker on the Red Sea and Suez Canal situation
20 DEC 2023 - Evergreen : News Detail - EVERGREEN MARINE CORP.
19 DEC 2023 - ONE : Preventative Measures for Navigation in the Red Sea
19 DEC 2023 - Maersk : Maersk Operations through Red Sea / Gulf of Aden | Maersk
18 DEC 2023 - CMA CGM : UPDATE n°II: Situation in the Red Sea and Notice of Force Majeure
18 DEC 2023 - HAPAG LLOYD : Force Majeure: Here's an update on the Red Sea and Suez Canal situation - Hapag-Lloyd
16 DEC 2023 - MSC : MSC PALATIUM III Incident in Red Sea - Rerouting Suez Traffic to Cape
16 DEC 2023 - ZIM : ZMP - New Freight Rates from Israel
FTA / APSA IN THE MEDIA
21 DEC 2023 : The Australian - Red Sea call 'leaving our allies in the lurch'
19 DEC 2023 : Stock and Land - Red Sea freight blockage has potential to disrupt all supply chains
19 DEC 2023 : Australian Financial Review - Freight, oil climb as Red Sea attacks shut down shipping
17 DEC 2023 : ABC News - UK and US shoot down more Houthi drones in the Red Sea as shipping companies pause operations
Paul Zalai - Director FTA | Secretariat APSA | Director GSF
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