- Tankers rerouting from Asia to Northwest Europe via the Cape of Good Hope face heightened costs and longer transit times due to Red Sea unrest.
- According to LSEG Shipping Research, this diversion adds approximately $932,905 in additional costs per voyage, extending transit times from 16 to 32 days.
The report highlights a significant financial burden for the shipping industry, particularly affecting Aframax tankers with costs escalating by 110%. Large container vessels also witness a 35% hike on the Asia to NW Europe route.
Impact on Maritime Traffic
Maritime traffic through the Suez Canal has seen a notable downturn, with average monthly transits dropping by 12.6% from June to November 2023. Container vessels’ daily traffic within the Red Sea has decreased by nearly 60% since mid-December, particularly affecting larger container ships with an over 80% decrease in transits.
Security Measures and Industry Response
In response to heightened security risks, vessels navigating the Red Sea are utilizing the Automatic Identification System (AIS) to broadcast deterrence messages. The industry is actively assessing real-time data, including insurance premiums and AIS messages, to mitigate risks effectively.
Fabrice Maille, Global Head of Shipping at LSEG, emphasizes the considerable impact of the conflict on global trade, requiring difficult decisions regarding financial costs and security risks. Industry players are integrating various data sources in real-time to address these challenges and develop tools and solutions for future crises.
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Source: Economic Times