Significant disruption to global network, warns shipping giant

The Maersk Hangzhou vessel was reportedly hit by an unknown object, en route from Singapore to Port Suez in Egypt. Picture: Independent Newspapers Archive

The Maersk Hangzhou vessel was reportedly hit by an unknown object, en route from Singapore to Port Suez in Egypt. Picture: Independent Newspapers Archive

Published Jan 8, 2024

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Despite higher shipping costs, as long as the Red Sea route remains unsafe for ships to pass through, ship operators are expected to divert their vessels via the Cape.

This is according to “Cape Times” shipping columnist and maritime expert Brian Ingpen, as Maersk announced that it would divert all vessels bound for the Red Sea / Gulf of Aden around the Cape of Good Hope for the foreseeable future in light of a recent incident involving Maersk Hangzhou and ongoing developments in the area.

Maersk made the announcement at the weekend, following a December 30 incident where the Maersk Hangzhou vessel was reportedly hit by an unknown object, en route from Singapore to Port Suez in Egypt.

In a statement, Maersk said: “We understand the potential impact this will have on your logistics operations, but please rest assured that all decisions have been carefully considered and ultimately prioritise the safety of our vessels, seafarers and your cargo.

“By suspending voyages through the Red Sea / Gulf of Aden, we hope to bring our customers more consistency and predictability despite the associated delays that come with the re-routing.

“While we continue to hope for a sustainable resolution in the near future and do all we can to contribute towards it, we do encourage customers to prepare for complications in the area to persist and for there to be significant disruption to the global network. Our teams are on hand to support with your planning, should you need any assistance.”

Ingpen said ships diverting do not need to pay Suez Canal tariffs or the added war-risk insurances that apply now to passages via the Red Sea.

“For many ships, especially those trading to or from Australia where the time difference at sea is not all that much more (three to five days depending on which port), the Cape route may be more attractive.

“Some bulk carriers (moving grain or minerals or steel, etc) might be carrying cargo that is not time-sensitive and therefore the extra days around the Cape do not matter so much in terms of delivery date for cargoes.

“Containerised cargoes, on the other hand, are often time-sensitive and need to arrive at their destinations on time.

Hence, initially there will be delays at some European or Asian factories in the delivery of goods (e.g. car parts) that could delay the manufacturing process.”

Ingpen, however, said the move meant higher shipping costs for all whose cargo moved on the diverted ships – mainly Europe, East Coast of America, Asia, Australia – as well as higher charter (hire) rates for all ships worldwide, increasing the general costs of shipping cargoes anywhere.

He said the biggest financial losses would be felt by Egypt as no revenue would be collected when ships were diverted to the Cape route.

According to Ingpen, this is not likely to affect South Africa’s ports too much as most diverted ships will have refuelled and restored elsewhere.

“Some may need fuel or stores and therefore may call here – SA ports are notoriously slow in providing services and the ports will need to improve their service (berthing and sailing) of ships.

“Some will take stores and urgent spares from launches or helicopters off SA ports.

“Some may land crew members going on leave and embark their replacements, also via launch or helicopter, obviating the need to enter our ports.

“These services will bring much-needed foreign exchange to South Africa.

“Some may need to enter port for urgent machinery/equipment repairs, in which case they will also take on some fuel, some stores and may do partial crew changes.

“These also bring some foreign exchange to the ancillary services at our ports,” Ingpen said.

This comes as the current situation in Palestine remains volatile, with the Gaza war raging on into a fourth month on Sunday as the Israeli army pounded the Palestinian territory with strikes and US top diplomat Antony Blinken was back in the Middle East seeking to avoid a wider escalation.

Israeli bombardments had killed at least 113 people in the past 24 hours, said the health ministry in the besieged territory, with two journalists among the victims when their car was struck in Rafah.

The journalists killed were working for Al Jazeera.

Cape Times