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The disruption in the Red Sea has started affecting shippers from India to North Europe with the French liner CMA-CGM more than tripled Freight All Kinds (rates applicable to all types of goods) from December 25. The FAK has been increased to $4,750 per TEU (twenty foot equivalent unit) against $1,000 two months ago. The rates include the Basic freight and the Bunker-related surcharges. Sources said others will soon follow suit.
With ships avoiding the Red Sea / Suez Canal due to the recent attacks by Yemen-backed Houthi militants, the ships are being diverted via Cape of Good Hope in the southern tip of Africa. This has significantly increased operating costs for the shipping lines.
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The cargo origin is from all Asian ports, including Japan, South East Asia and Bangladesh, and the destination is to all North European ports. This includes the UK and the full range from Portugal to Finland/Estonia), the line said.
Contingency charge
The liner had already announced a contingency charge (subject to regulated countries on all cargo including floating cargo) will be applicable with immediate effect and until further notice as follows ranging between $150 and $1500 between various destinations. For instance, the charge from US East Coast to Indian Subcontinent-Middle East Gulf was $150 while from Indian Subcontinent/Middle East Gulf to the US East Coast and US Gulf was $1,500.
“The rate increase is bound to increase. The lines don’t have a choice as their operational expenses will substantially increase,” said the source. The transit time for ships nearly doubled, and this, in turn, led to an increase in freight cost, they said.
Meanwhile, the Danish shipping major Maersk on Friday announced that with the ongoing Red Sea Situation, there are changes in its ME2 service between Jebel Ali and Genoa. Its container vessel Maersk Genoa will not call Nhava Sheva on January 12 in its current voyage. Further, vessel Maersk Guayaquil to arrive on January 19 is further delayed since it will be moving through the Cape of Good Hope.
Similarly, the ship Cap San Juan also moving through the Cape of Good Hope would be the earliest vessel we anticipate to call on this service at this moment.
Till the situation is under control for the Red Sea, all the vessels in this service would be moving through Cape of Good Hope until further notice and would have an extended transit time, the line said.
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