Cape of Good Hope
Cape of Good Hope © Pitchi

The impending network changes made by the big container lines look set to ensure continuation of services around the Cape of Good Hope until the latter half of 2025.

CEO and partner at Vespucci Maritime Lars Jensen told The Loadstar resumption of services through the Suez Canal would involve further network changes, and he questioned whether carriers would be willing to make these before August, “at least”.

“Shipping lines are set to phase-in their new networks over the course of February and March, and this means reliability during this period will be all over the place,” he said.

“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 be required to do it again in April or May.”

Mr Jensen speculated that even if the Red Sea Crisis was resolved, the diversion of ships around the Cape would likely remain in place for a further six months.

Pointing to Maersk’s early response to attacks on commercial shipping by the Iran-backed Yemen-based Houthi militia, he also said the carriers “had learned” from the “extreme disruption” brought about by the Danish carrier’s u-turns on using the Red Sea.

“If you call it too early, you have to revert and this becomes extremely disruptive, so for carriers, there is little impetus to go through Suez just yet,” he added.

Furthermore, Mr Jensen said, shippers were equally hesitant about “jumping the gun”, favouring the stability of the longer transits to potential disruption, noting that the response to CMA CGM’s planned new Suez service typified shippers’ mindsets.

“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,” he said. “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).”

Mr Jensen explained that if a ship was attacked by Houthis, it could catch fire and leak fuel into the sea, leading to “an expensive clean-up” and a likely declaration of GA.

While shipper insurance would potentially cover this under normal circumstances, given the known threat in the Red Sea, Mr Jensen said, “insurance would not cover GA in a risky area”, even regardless of naval protection on offer, in the case of CMA CGM.

But Mr Jensen added: “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.”

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