SIMIC

SPOT rates have surged as carriers impose surcharges to cover the costs of rerouting vessels via the Cape route to avoid Red Sea Yemeni missile attacks, reports New York's Journal of Commerce.

Eight of the world's top 10 container carriers are now sailing around the Cape of Good Hope, with Cosco and Hong Kong's OOCL becoming the latest to announce suspensions through the Suez Canal.



Thus far, 121 containerships with a capacity of 1.6 million TEU were taking the longer route, according to Kuehne+Nagel, and that number is expected increase.



With another 6,000 nautical miles and 10 days added to the standard 40-day Asia-Europe transit, carriers are now speeding vessels at a US$2 million per ship cost.



Mediterranean Shipping Co (MSC) from January 1 will impose a "contingency adjustment charge" of $500 per TEU on shipments from Europe to Asia and the Middle East. Hapag-Lloyd said it will levy a $500 per TEU surcharge from Europe to Asia and Oceania.



CMA CGM has already implemented a "Red Sea charge" of $2,700 per FEU for all cargo being shipped to or from Red Sea ports.



"The rerouting of these vessels is a precautionary measure taken to navigate away from potentially unsafe areas," CMA CGM said in a customer advisory. "While we understand it may impact your logistics and supply chain operations, it is a necessary step which comes with a cost."



CMA CGM and Hapag-Lloyd starting January 1 will impose a $1,000-per FEU peak season surcharge on cargo from all main Asian ports to the Mediterranean and North Africa. On Asia-North Europe, MSC, CMA CGM and Hapag-Lloyd will set FAK rates at $3,000 per FEU.



Zim Integrated Shipping Services last week set its FAK rates for Asia to Israel and Turkey at $3,260 per FEU. Several ocean carriers, including Zim, also have "war risk" surcharges in place for shipments to and from Israel.



Shipping firms avoid Red Sea as Houthi attacks increase



MARITIME authorities, insurers and unions have ordered, advised and cajoled ships to avoid the Red Sea and not be targets of Yemeni rockets fired in support of Gaza in its war against Israel, Reuters reports.



Mediterranean Shipping Company (MSC) said on December 16 its ships would not transit through the Suez Canal, with some already rerouted via the Cape of Good Hope, a day after two ballistic missiles were fired at its vessel.



Maersk stopped all shipments through the Red Sea until further notice, following a "near-miss incident" involving its ship. On December 19, Maersk said it would reroute its vessels around the Cape of Good Hope.Later it said it would stop doing so once the US-led naval coalition was in place and reduced risk. Until then it would impose extra charges on container transport on affected routes.



French shipping giant CMA CGM on December 22 it had rerouted more than 25 vessels around the Cape of Good Hope. likely continue to grow. "Blank sailings and rate increases are expected to continue across many trades into Q1 of 2024," it said.



The German container shipping line Hapag-Lloyd said on December 21 it would reroute 25 ships by the end of the year to avoid the Suez Canal and the Red Sea, adding it would take further decisions at the end of the year.



Network Express (ONE), a joint venture of Japan's Mitsui OSK Lines, NYK and "K" Line said on December 19 it would reroute vessels away from the Suez Canal and the Red Sea. Instead, its ships will take the Cape route.



Taiwan's Evergreen said on December 18 its vessels on regional services to Red Sea ports would sail to safe waters nearby and wait for further notification, while ships scheduled to pass through the Red Sea would be rerouted around the Cape of Good Hope.



HMM, the South Korean container shipping giant said on December 19 it had from December 15 ordered its ships from Europe that would normally use the Suez Canal to reroute via the Cape of Good Hope for an indefinite period of time.



Hong Kong's OOCL said on December 21 it had guided its vessels to either divert route or suspend sailing to the Red Sea. The company, owned by Orient Overseas (International) Ltd (0316.HK), has also stopped cargo acceptance to and from Israel until further notice.



Taiwan's Yang Ming said on December 18 it would divert ships sailing through the Red Sea and the Gulf of Aden via the Cape of Good Hope for the next two weeks.