Rerouting tankers around the Cape of Good Hope due to avert attacks from Houthi rebels can add nearly a million dollars per voyage while also doubling transit time, according to LSEG Shipping Research, a division of the London Stock Exchange.
An LSEG report indicated that rerouting an Aframax tanker from Asia to NW Europe, via the Cape of Good Hope, caused an incremental cost of about $932,905 USD per voyage. It also extends the transit time from 16 to 32 days. Increased fuel costs account for most of the additional expenses.
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.
Houthi attacks on merchant vessels have also provoked a marked reduction in transits through the Suez Canal. According to LSEG Shipping Research, average monthly transits from June to November 2023 amounted to about 1914, which dropped to 1672 in December. By Jan. 22, the transits were down to 947, marking a significant 32.6% decline.
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 noted.
(Tanker image from YouTube)
