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Eighteen shipping companies are re-routing their vessels around Africa to avoid the Red Sea amid an upsurge in attacks on shipping, blamed by Western countries on Yemen’s Huthi rebels, the UN’s maritime agency said Wednesday.
“A significant number of companies, around 18 shipping companies, have already decided to reroute their vessels around South Africa in order to reduce the attacks on vessels,” said International Maritime Organization chief Arsenio Dominguez.
“(This) represents an additional 10 days to the journeys (and) negative impact on trade and on increasing freight rates.”
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https://www.ft.com/content/49a6046b-824f-4ab9-b410-54428942686e
Attacks by Iranian-backed Houthi rebels on container ships navigating the Red Sea stopped the westward flow of presents this Christmas. But the disruption has been something of a gift to shipping lines. Danish containerline Maersk joined other groups and confirmed this week that transits along the route would pause. Longer journeys around the Cape of Good Hope are sparking fears of a supply crunch and sending freight rates and share prices for operators higher. That is a sharp change of course for the sector. The soaring rates seen during the pandemic quickly prompted record orders of new ships and widespread expectations of a capacity glut. Those fundamentals have not changed and deliveries are still expected to peak this year. Share prices for Maersk and Hapag-Lloyd, which were previously at three-year lows, illustrate this. A reprieve will be welcomed by shareholders. How long it lasts depends on when order is restored to shipping lanes.
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Rose Rambles... 