AfricaAsiaEducationFuelShipownersWorldwide

European ports speak out on Red Sea conflict

 

Following the serious attacks on ships, mainly – but not only – container ships, in the Red Sea by the Houthi movement, shipping lines decided to redirect their ships around the Cape of Good Hope in order to avoid the operators risks of attacks to both vessel and crew. With these attacks the rebels are seriously hampering the traffic through the Suez Canal which is a strategic waterway and the fastest shipping route between Asia and Europe. The rerouting adds another 3,000-3,500 nautical miles (6,000km) to this route and can make the voyage Asia- Europe 8 to 15 days longer, depending on the shipping segment.

The European Sea Ports Organisation (ESPO) fully shares the safety concerns of the shipping lines and the need to protect the crews and avoid any risk of attack on vessels. Europe’s ports underline their strong concerns about this escalating situation, which is also causing important disruptions in the supply chain and risks to hamper the just in time deliveries to certain industries in the short run. Ports moreover see container rates going up steeply, and reaching again the extreme high rates that were being applied by shipping lines during COVID.

“The situation in the Red Sea jeopardises the passage through the Suez Canal, which is the main maritime artery connecting Asia and Europe. This crisis is once again creating major supply chain disruptions, and is adding an element of uncertainty to an already very difficult geo-economic and geopolitical environment. The longer routes, and possible re-organisation of calls in Europe will be impacting ports, which have to adapt and be flexible in view of keeping the supply chains going. In the case of the Ever Given, we were faced with an unfortunate accident and the solution depended on technical and operational expertise. Now, we are facing a geopolitical hindrance of a major commercial trading route, which makes it more difficult and unpredictable to solve.”, says Zeno D’Agostino, chair of ESPO.

What’s happening? (Click to open)

  • In recent weeks, militias based in Yemen have made attacks on US warships and on merchant vessels in the Red Sea and Gulf of Aden.
  • These seaways connect to the Mediterranean via the Suez Canal and, in normal times, many merchant vessels pass through, carrying fuel and other freight.
  • Shipping companies have already responded, with some now routing their vessels around the Cape of Good Hope, rather than risking the usual Red Sea route.
  • This adds thousands of miles to journeys, increasing costs and creating delays. Diverting via the Cape means that ships can make fewer trips, effectively reducing shipping capacity on the East-West route.
  • Disruption to Red Sea traffic threatens business and consumer interests in many countries. The US has therefore developed a multi-national initiative to safeguard shipping.
  • US and UK forces have responded to Houthi militia attacks on shipping in the Red Sea, mounting strikes against multiple targets in Yemen.
  • Yemeni leaders have issued statements threatening retaliation and committing to further action against shipping. These statements have explicitly connected attacks to the conflict in Gaza.1
  • Global oil prices rose briefly in the aftermath of air attacks, exceeding US$80 per barrel, but quickly fell back and stand at around US$75 at time of writing.2
  • The Suez Canal is currently open in both directions.3 However, the number of ships transiting the canal has fallen sharply.
  • Large shipping companies (including Hapag-Lloyd, Maersk and MSC) have diverted traffic from the Red Sea / Suez Canal route via the Cape of Good Hope.
  • This will add to the length of journeys and to the cost of fuel, especially if ships have to travel faster in order to minimise journey times.
  • The cost of global freight has jumped sharply, with The Shanghai Containerised Freight Index up from around 1,000 in early 2023 to around 2,200 now.

Source: www.igd.com

 

This article is shared by courtesy of ESPO (the European Sea Ports Organisation) www.espo.be

For more articles about the Red Sea, click here.

 

Back to top button