Policy & Compliance
The International Transport Forum (ITF) has published a background paper on the effects of the Red Sea crisis on shipping, supply chains and the environment The impact of the Red Sea crisis
approximately 10 days one-way (and 20 days on a round trip) and reduced schedule reliability. On the last point, the schedule reliability decreased by 10 percentage points from 62% to 52%. However, this is still far above the very low figures reported during the COVID-19 pandemic. The need to deploy more ships to ensure a Far East-Europe weekly service meant that shipping lines increased the ships on this route from 12 to 15 vessels. This led to a shift of ship capacity, mostly from Pacific services, resulting in cascading effects of disruptions to other non-affected routes. Examining the different costs of the crisis for shipping companies (extra fuel, insurance and maritime security costs but without Suez Canal fees) leads to the conclusion that the additional costs for an Asia-Europe round trip by a median-sized containership are up to USD1 million if the ship continues to take the Suez Canal route, and USD1.7 million if the ship takes the Cape of Good Hope route. These diversions represent an additional cost per 40 ft container into Europe of up to US$160 via the Suez Canal or US$272 via the Cape of Good Hope. However, the increase in costs for users of maritime services has largely been greater than these extra costs, due to higher freight rates
W hen the Red Sea Crisis subject. The questions tended to focus on operational and liability concerns, such as the impact of delays, whether war risk cover would be withdrawn impacting insurance policies, and who will bear the cost of additional fuel and ETS surcharges. The International Transport Forum (ITF) has published a background paper on the impact of the Red Sea crisis on shipping, supply chains and the environment. The paper also details policy considerations and calls for better cooperation between national authorities to ensure connectivity and fi rst started, BIFA received many questions on this transparency of surcharges. The latter call is strongly supported by BIFA as detailed in our article about ETS surcharges in May’s BIFAlink . The Red Sea is one of the main trade lanes in the world with 14% of all global trade and 30% of all containerised freight shipping through this route. Since November 2023, Houthis based in the Yemen have been launching attacks, focusing on commercial ships, one of which was sunk.
The ITF’s figures are lower than those reported in the press as they exclude attacks on fishing vessels and engagements with naval vessels, etc. Around 31% of all attacks (mainly using drones) on commercial vessels were on container vessels and 24% on bulkers, reflecting the preponderance of these vessels using the route. Reduced transits The paper reveals that the number of ships transiting the Bab-el- Mandeb Strait decreased by around 55%, including up to 75% of container carriers, during the recent crisis. There have been additional problems caused by a resurgence of activity by Somali pirates. Despite some alternative routes via land, most of the traffic was redirected via the Cape of Good Hope, resulting in longer journeys of about 8,500 nautical miles, an increase of transit times of
“ The number of ships transiting the Bab-el- Mandeb Strait decreased by around 55%, including up to 75% of container carriers, during the recent crisis
24 | June 2024
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