Carriers divert via the Cape until task force nullifies Houthi threat

Inventor Chemical Tankers, the Norway-based owner of the Swan Atlantic the latest casualty in the Red Sea, which was hit by a missile fired by the Houthi Movement has blamed misinformation on the web as the cause of the attack.

Swan Atlantic was one of two vessels attacked yesterday in the southern Red Sea and the vessel is now being assisted by the USS Carney, but the company said there were no crew casualties.

Another vessel the MV Clara reported an explosion close to the vessel but the ship was undamaged and no crew were injured.

An Inventor Chemical statement said, “For the record, there is no Israeli link in the ownership (Norwegian), technical management (Singapore) of the vessel nor in any parts of the logistical chain for the cargo transported. We note that information provider Marine Traffic has wrongfully claimed that the vessel is managed by an ‘Israel affiliated company’ on their web site.”

Attacks on these tankers brings into sharp perspective the difficulties in defending commercial vessels from missile and drone attacks from the Yemen.

Most of the major container ship operators have now said their vessels will not transit the Suez Canal until the passage for shipping is declared safe, with many ships now heading around the Cape of Good Hope, a journey that takes around 10 days extra to sail, according to industry experts.

Drewry Shipping Consultants analyst Simon Heaney told Container News that virtually every ship will head to Europe via the Cape, and that this will “change the dynamic” for container shipping.

“The balance of power is changing, previously carriers were under the cosh, with growth in capacity and falling freight rates expected well into 2024,” said Heaney, he added the change of fortune for the carriers will depend on how long the Red Sea crisis lasts.

“If it’s two to three months then it may have a smaller effect, but if longer carriers will need to see that the task force being put together by the US [in Operation Prosperity Guardian] is successful, they will want to see all risks eliminated,” explained Heaney.

One company has already diverted all its ships, Israel based Zim and all Israeli owned vessels are being withdrawn from services that transit the Red Sea according to consultancy Linerlytica.

Around 42 Israeli linked vessels have been diverted over the past three weeks, including 20 ships on the Asia to Europe and the Mediterranean services that have re-routed to the Cape. Another five Zodiac owned, MSC operated vessels have been redeployed from the Asia to Europe trades to the Jaguar service on the Pacific.

Heaney believes that vessels sailing via the Cape will increase their speed but that weekly services will need another vessel in order to maintain schedules, however, “European ports will initially have difficulty processing ships that are now out of schedule”.

Moreover, there will need to be changes made to serve the Mediterranean, with the most likely change being calls added at Algeciras and Tangier in Morocco near the Gibraltar Strait and cargo transhipped to Eastern Mediterranean destinations.

Analysts Xeneta said that ocean spot rates had spiked by 20% since Friday following the announcement by liner companies that they would avoid the Red Sea region.

“The region is essentially in a war situation because it is too dangerous for many vessels to sail through the Red Sea and therefore also the Suez Canal, which is the major artery for world trade,” said Peter Sand, Xeneta Chief Analyst.

According to Sand, there will be US$1 million in extra fuel costs for sailing around the Cape.

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