HomeMaritime..........And here comes the costs for the Red Sea impasse

……….And here comes the costs for the Red Sea impasse

In any conflict or war situation, there are always collateral damages.. Trade in general, and the maritime industry, in particular, seems to have unfortunately become collateral damage in the aftermath of the conflict in the Red Sea region involving Israel, Palestine, Hamas, and now the Houthi rebels..

As we have seen, global trade is facing a double whammy with challenges in the Suez Canal and Panama Canal..

Many of the leading global shipping lines such as MSC, Maersk, CMA CGM, Hapag Lloyd, and others have rerouted their ships around Africa’s Cape of Good Hope to avoid the Red Sea and transit via the Suez Canal..

This naturally increases transit time and also the cost of shipping for everyone concerned and naturally, shipping lines have started implementing additional surcharges to cover these costs..

In a price and surcharge update, CMA CGM announced that they have implemented a RED SEA charge which will apply with effect from the 20th of December 2023 for cargo on board or to be loaded/discharged to/from the Red Sea ports covering the ports of Jeddah, Port of Neom, Djibouti, Aden, Hodeidah, Port Sudan, Massawa, Berbera, Aqaba, Sokhna..

The charges will be USD 1,575/20′ and USD 2,700/40′ for dry containers while the Reefer container & special equipment will be charged at USD 3,000 per container..

The world’s 3rd largest container carrier has, however, given clients an option to accomplish the Bill of Lading at the designated hub ports..

MSC, the world’s largest container shipping line has also issued a similar communique citing the recent events in the Red Sea and their decision to divert their ships via the Cape of Good Hope to maintain the safety of the crew, cargo, and ship..

As per MSC, from the 23rd of December 2023 (last container gate-in date), they will implement a Contingency Surcharge (CAC) of USD 1500/container on all shipments from the Indian Sub-Continent (India, Pakistan, Bangladesh, and Sri Lanka) and the Middle East to Europe/Scandinavia/Baltic/ Mediterranean/Adriatic and Black Sea destinations..

More lines are sure to follow with such additional surcharges which will ultimately in one way or another filter down the line to our local supermarket..

While measures like Operation Prosperity Guardian are being put in place to counter the Houthi threats, there are questions about whether this US-led initiative and naval force can end attacks on ships by the Houthi rebels and concerns remain about the Red Sea impasse..

Let us hope that this issue will be sorted out before #redseaimpasse starts trending..

Hariesh Manaadiar
Hariesh Manaadiarhttps://www.shippingandfreightresource.com
I am Hariesh Manaadiar, the Founder of Shipping and Freight Resource.. I have been in the dynamic shipping and freight industry for over three decades and have worked in several sectors.. I share my experiences and knowledge of the industry through this blog for those looking for help in the industry.. Stay subscribed for more free useful content about shipping, freight, maritime, logistics, supply chain and trade..

1 COMMENT

  1. As they say in every crisis there is an opportunity and here is it is. I think shipping lines such as MSC, Maersk, CMA CGM, Hapag Lloyd, and others have found an opportunity for charging extra surcharges even though the Houthi’s had confirmed that their attacks are directed only against those ships destined for Israel to force them to stop the war on Gaza and let humanitarian aid to Gaza at same time reassuring the rest have nothing to worry about and their passage through the Red Sea won’t be hindered. So far no shipping vessel heading to Egypt, Sudan, Somaliland, Djibouti have been attacked. But who will turn down an extra income when opportunity presents itself and you can justify

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