SIMIC

ANALYSTS say rerouting via the Cape route will require upwards of 1.7 million TEU of extra capacity, reports London's Lloyd's List.

Carriers could speed up vessels to make up for longer voyages, as they will require additional capacity to maintain services that typically used the Red Sea route, say analysts.



Such services would normally use the Red Sea route to and from the Suez Canal following the disruption caused by the Houthi missile strikes from Yemen, according to analysts.



Rerouting all containership traffic around Africa would soak up five to six per cent of global capacity, said Lars Jensen, chief executive of Vespucci Maritime.



However, given the current climate of overcapacity, this is certainly feasible, he said.



"Drought in the Panama Canal means vessels on the Asia to US east coast route cannot use Panama and this will result in more significant disruptions for such vessels," said Mr Jensen.



He also noted how the "real" containership freight rate effect will not be felt until around four weeks' time.



Containership freight rates on the Asia to the Mediterranean route have already risen by 20 per cent, according to Peter Sand, chief analyst of the Xeneta benchmarking service.



"The worst case scenario for shipping would be the failure to get a coalition of navies to escort merchant vessels in the Red Sea," said Mr Jensen.



Rerouting vessels around Africa will likely add $1 million to a large containership's fuel costs, said Mr Sand.