Several global shipping lines plan to steer clear of the Suez Canal, while the escalating situation in the Red Sea, coupled with attacks on cargo ships, has heightened concerns in the global shipping industry.
The new routes around the Cape of Good Hope entail additional transportation costs, increasing risks and extending transit times. Experts said that this will intensify the challenges the industry faces amid a sluggish economic and trade recovery and high inflation worldwide.
"Recent attacks on commercial vessels in the area are alarming and pose a significant threat to the safety and security of seafarers. We are deeply concerned about the highly escalated security situation in the southern Red Sea and Gulf of Aden," global shipping conglomerate Maersk said in a statement sent to the Global Times on Monday.
Following a near-miss against the Maersk Gibraltar on December 14 and yet another attack on a container vessel the day after, "we have instructed all Maersk vessels in the area bound to pass through the Bab al-Mandab Strait to pause their journey until further notice," the shipping company said.
Other major freight lines including MSC said on Saturday that they won't transit the Suez Canal in either direction.
This came after the container ship MSC Palatium III was attacked on December 15 while transiting the Red Sea under sub-charter to the Messina Line.
Evergreen Marine Co announced on Monday evening that given that fiercely escalation of war situation in recent days, the company will temporarily suspend Israel import and export services due to rising risks and safety considerations with immediate effect until further notice.
Yemen's Houthi rebels on December 14 claimed a drone attack on an Israel-bound cargo ship in the Red Sea. The rebel group has vowed to prevent all Israel-bound commercial ships from passing through the Red Sea until the ongoing Israeli war on the Palestinian enclave of the Gaza Strip ends, the Xinhua News Agency reported.
This incident is likely to further drive up shipping rates.
If unable to pass through the Red Sea, vessels will need to detour around the Cape of Good Hope, adding an estimated 7,000 to 10,000 kilometers and an extra seven to 10 days to the journey, the Global Times learned.
In the morning session on Monday, the shipping sector surged by 4.72 percent, leading gains in both the Shenzhen Stock Exchange and the Shanghai Stock Exchange. Both Ningbo Ocean Shipping Co and China Master Logistics Co hit the limit-up and closed at the day's limit of 10 percent.
This year, the container shipping industry has faced challenges such as weakening demand. Chinese industry experts said that the situation, if it intensifies, will have a serious impact on global shipping, leading to hikes in rates and costs, given the importance of the Suez Canal for global trade.
The Suez Canal is one of the world's largest maritime arteries, and its role is especially crucial as the Panama Canal faces a severe drought, significantly reducing its navigational capacity, Zhong Zhechao, founder of One Shipping, an international logistics service consulting firm, told the Global Times on Monday.
Serving as a major passage for Asia-Europe, Asia-Mediterranean and Asia-US East Coast routes, the Suez Canal's impact on global trade and shipping has become increasingly vital. The Houthi rebels' attacks further underscore the importance of the Red Sea and the Bab el-Mandeb Strait, a key gateway to the Suez Canal, Zhong said.
In less than a month, at least 16 vessels of various types have been attacked or even seized. So far, at least five out of the world's largest seven shipping companies have suspended passage through the Red Sea. These five giants hold up to around half of the global shipping market.
Chinese experts believe that the Red Sea situation will have a much greater impact on the global shipping industry than the Suez Canal obstruction in March 2021 when the Ever Given, a container ship that had run aground in the canal, blocked the channel.
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