The Red Sea crisis appears to be going nowhere any time soon.
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According to recent newsletter from Alphaliner, “most industry stakeholders [are] now banking on continued Cape of Good Hope diversions until 2025 at least.” The mass rerouting of container ships around southern Africa has been consistent since December, weeks after the Yemen-based Houthis began launching drone and missile attacks on commercial vessels in the Red Sea.
The shipping research tool and database said that although container ships have added shipping capacity across 2023 and 2024, this additional capacity has easily been absorbed.
Roughly 2.3 million 20-foot equivalent units (TEUs) of new tonnage was delivered last year, and a further 1.7 million TEUs added to the 30 million TEU fleet this year, according to Alphaliner. Yet the Red Sea crisis has pushed many vessels onto a route 20 percent longer, the firm said.
Maersk said that Asia-to-Europe ocean freight capacity across the entire container shipping industry would fall anywhere from 15 percent to 20 percent in the second quarter. But the ocean freight giant is now anticipating that the knock-on impacts have gone beyond the Asia-to-Europe trade lane into its entire global network.
“The cascading impact of these disruptions extends beyond the primary affected routes, causing congestion at alternative routes and transshipment hubs essential for trade with Far East Asia, West Central Asia and Europe,” Maersk said in an online advisory Wednesday. “Ports across Asia, including Singapore, Australia and Shanghai, are experiencing delays as ships reroute and schedules are disrupted, caused by ripple effects from the Red Sea.”
For example, Maersk said its Oceania network was hit by congestion in Southeast Asian hubs caused by equipment shortages and capacity constraints stemming from the Red Sea disruption.
On top of the port delays and bottlenecks, the networks have been reorganized with more vessels being moved to different regions to better meet the demand for capacity.
The container shipping giant said it is working to minimize customer disruptions through several key investments and operational adjustments, which include securing additional containers and exploring further capacity enhancements.
Along with the capacity concerns, large container ships are in short supply. According to a report from Linerlytica, almost all large vessels have been chartered until 2025, causing liner and feeder operators to turn their attention to smaller vessels, whose owners are seeking to lock-in higher rates for longer periods.
“Availability of prompt tonnage is extremely scarce at the moment, especially for ships over 2,000 TEU,” the report said. “The charter market remains effectively sold out for the larger vessels until next year. Charter rates continue to rise through the course of the week, although activity levels have slowed down noticeably.”
Linerlytica noted that while capacity was still being added to services from Asia to the U.S. West Coast, South America and the Indian subcontinent through August, there was still a shortage of vessels.
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Alphaliner said rates will continue at high levels due to the diversions, with additional impacts hitting the ship scrapping market—in which vessels are deconstructed—“despite ever more stringent environmental regulations and pressure to phase out the less-efficient ships.”
Vessel-scrapping numbers fell from 77,000 TEUs in the first half of 2023 down to just 48,600 containers in the 2024 period.
While the impacts of the ongoing Houthi attacks to the wider container shipping industry have largely resulted in a mass exodus from the Red Sea and its chokepoints, there are still vessels traversing the waterway that are enduring the potential risks.
On Tuesday, the Houthi rebels released video that showed what they claim is an attack on an oil tanker, the Chios Lion, conducted the day prior.
U.S. Central Command (CENTCOM) reported on the attack Monday, saying the Houthis struck the tanker with an unmanned surface vehicle in the Red Sea, causing damage to the vessel. No injuries have been reported.
CENTCOM also said the Houthis launched multiple attacks on the MT Bentley I tanker vessel.
Between October and April, the Houthis carried out at least 53 attacks on commercial vessels, the U.S. Department of Transportation and Maritime Administration reported in April.
The jury is still out on whether another vessel could have potentially been attacked by the Iran-backed militant group.
One such vessel, the Prestige Falcon oil tanker, capsized 25 nautical miles off the coast of Oman Monday. That event has not been confirmed to be an attack by the Houthis.
Of the 16 crew members on board, nine have so far been rescued, according to Omani authorities. Search and rescue operations were still ongoing to locate the crew.
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