Shipping Industry In Flux: Environmental Concerns And Capacity Shifts

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Suez bypass increases emissions, adding 1,000+ tonnes of fuel per ship. Analysts predict 2,700 tonnes of extra CO2, prompting speed-ups and potential slowdowns. 67 vessels rerouted, and 75 await orders, causing a 20% capacity drop. Evergreen, OOCL rejected Israeli cargo, raising shipping costs. Shippers may see substantial price hikes.

Emissions Surge with Suez Canal Diversions

Shipping lines opting for the longer route around southern Africa face a significant increase in emissions due to the added distance and fuel consumption. With vessels diverting from the Suez Canal, each voyage is extended by 3,000 nautical miles and five days, contributing to higher CO2 emissions. The additional fuel burn, estimated at around 900 tonnes per trip, raises environmental concerns, as approximately 3.15 tonnes of CO2 are emitted for every tonne of fuel burned.

Impact on Shipping Capacity and Costs

The rerouting of vessels is not only affecting emissions but also impacting shipping capacity and costs. The surge in diversions prompts vessels to speed up initially, straining fuel consumption. If diversions persist, vessels are likely to slow down and be incorporated into trades, leading to a potential need for up to 50 more ships. This shift in shipping dynamics, coupled with systemic over-tonnage, could result in increased prices for shippers, with a potential 20% decrease in capacity on affected trade lanes. Additionally, recent refusals of Israeli cargo by shipping companies and surcharges on shipments to Israeli ports further contribute to rising costs and logistical challenges.

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Source: The LOADSTAR

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