The impending network changes by major container lines appear set to ensure the continuation of services around South Africa’s Cape Peninsula until at least the latter half of 2025.
CEO and partner at Vespucci Maritime, Lars Jensen, has said that the resumption of services through the Suez Canal will necessitate further network adjustments, raising doubts about whether carriers will be prepared to make such changes before August, “at least”.
He is quoted in The Loadstar saying: “Shipping lines are set to phase in their new networks over the course of February and March, which means reliability during this period will be all over the place.
“However, the moment they decide to go through the Red Sea again, they will have to change their networks. I do not see a scenario in which they are going to be happy, having done this in February, to then be required to do it again in April or May.”
Jensen speculated that even if the Red Sea crisis were resolved, the diversion of ships around the Cape would likely remain in place for another six months.
Referring to Maersk’s early response to attacks on commercial shipping by the Iran-backed Yemen-based Houthi militia, he noted that carriers “had learned” from the “extreme disruption” caused by the Danish carrier’s decisions to revert to using the Red Sea.
“If you call it too early, you have to revert, and this becomes extremely disruptive. For carriers, there is little impetus to go through Suez just yet.”
Furthermore, Jensen stated that shippers were equally reluctant to “jump the gun,” favouring the stability of longer transit times over potential disruption. He highlighted the response to CMA CGM’s planned new Suez service as representative of shippers’ current preferences.
“CMA CGM has been offering an Asia-Mediterranean service operating through the canal, escorted by naval vessels, and announced a new service running to the US.
“But customers baulked, telling the carrier they did not want their goods going through the Red Sea.
“For shippers, the concern is not that the Africa route takes longer, nor that they may lose their cargo if a ship is attacked. The concern is general average (GA).”
Jensen explained that if a ship were to be attacked by Houthis, it could catch fire and leak fuel into the sea, resulting in “an expensive clean-up” and a likely declaration of GA.
While shipper insurance would potentially cover such incidents under normal circumstances, Jensen noted that, given the known threat in the Red Sea, “insurance would not cover GA in a risky area,” even with naval protection, as in the case of CMA CGM.
However, Jensen said: “When it becomes clear that there is no more risk, competitive pressures will prompt one carrier to start using Suez again, and then they will all follow suit, because it will be quicker and cheaper for shippers.”
