Tankers face million-dollar detour around Cape of Good Hope
Rerouting tankers around the Cape of Good Hope due to Red Sea attacks can add nearly a $1 million / voyage while also doubling transit time, according to LSEG Shipping Research.
A recent report by LSEG Shipping Research, a division of the London Stock Exchange Group, revealed that rerouting an Aframax tanker from Asia to NW Europe, via the Cape of Good Hope, causes an incremental cost of about $932,905 USD per voyage and extends the transit time from 16 to 32 days. The additional expenses are largely due to the increase in fuel costs, gCaptain reported.
Consequently, the total costs for an Aframax tanker increases by 110%, and for a larger container vessel, it rises by 35% for a voyage between Asia and NW Europe.
Aframax tankers, which can carry both refined products and crude oil, range between 80,000 and 120,000 deadweight tons and make up a large portion of the global tanker fleet.
Houthi attacks on commercial vessels have also resulted in a considerable reduction in transits through the Suez Canal. According to LSEG Shipping Research, average monthly transits from June to November 2023 were around 1914, which reduced to 1672 in December, indicating a 12.6% drop. By Jan. 22, the transits were down to 947, marking a significant 32.6% decline.
Moreover, daily containership traffic in the Red Sea has seen a nearly 60% drop since mid-December. The larger container vessels seem to have been the most affected, with over 80% decline in transits, LSEG’s report showed.
Those who still choose to transit via the Red Sea are using AIS to broadcast deterrence messages, aside from following standard security protocols.
Fabrice Maille, Global Head of Shipping at LSEG, underscored the importance of the Suez Canal and the Red Sea to global trade and highlighted the considerable impact of the conflict.
“As we saw with the grounding of the Ever Given in 2021, the importance of the Suez Canal and the Red Sea to global trade cannot be understated,” said Maille.
