Shipping companies from multiple countries have contacted the US Navy about the potentially heightened threat of piracy for diverted ships after a container ship ran aground and blocked the Suez Canal.
The incident, which salvage experts say could take weeks to resolve, has forced the industry to anchor billions of dollars in cargo at sea or take long – and potentially risky – routes across Africa.
A spokesman for the United States Navy’s Fifth Fleet told the The Washington City Times that the blockade over the past two days has sparked a series of questions from global shipping companies about maritime security in the region, which has a history of piracy.
Asian shipping associations confirmed the concerns. Zhao Qing-feng, office manager of the China Shipowners’ Association based in Shanghai, said potential ship rerouting included security concerns.
“Africa is at risk of piracy, especially in East Africa,” he said, adding that shippers may need to hire additional security agents.
Willy Lin, Chairman of the Hong Kong Shippers’ Council, said that due to piracy on the African route, warships from different countries may be needed to protect ships in the area.
The warnings came as stocks in Asian shipping companies jumped Friday ahead of higher freight rates as industry executives considered diverting freight around southern Africa, which would take at least seven days and significant travel costs.
Chinese Cosco Shipping and South Korean Hyundai Merchant Marine led the price appreciation in Asia, up nearly 10 percent after salvage experts indicated it could take weeks to dislodge the 400-meter Ever Given container ship from the banks of the Suez Canal .
While East Africa has long been known for its piracy, there has been an increase in naval kidnappings and other maritime crimes in West Africa in recent months.
The US Navy said there were no repercussions yet for naval operations in the region, but companies were concerned that their ships would be at risk if the blockage continued.
James Wroe, head of liner shipping operations at Maersk Asia Pacific, wrote on social media that the decision to divert or not was a “roll of the dice.”
The Suez Canal in figures
The average number of ships passing through the 120-mile Suez Canal each month – more than 50 ships a day
Bulk carriers account for nearly 30% of the traffic, container ships 25% and tankers 15% of the transit
Number of ships that crossed the Suez Canal in 2020 (data provided by Refinitiv)
Hyundai Merchant Marine has already diverted the Hyundai Prestige, which sails from Southampton to Laem Chabang in Thailand, to bypass the Suez Canal and travel around the Cape of Good Hope in South Africa. Ship brokers in Singapore and Tokyo said similar rerouting decisions are “imminent” for a number of oil tankers and other ships.
Ships traveling from Singapore to Rotterdam via the Cape of Good Hope face an additional cost of $ 400,000 per ship for a full voyage, said Anoop Singh, head of tanker research at cargo broker Braemar ACM.
Shipping companies estimate that nearly 200 ships were stranded on either side of the Suez, the bottleneck through which about 12 percent of world trade flows. The route is crucial for oil, gas and in-demand food products such as coffee.
Dutch and Japanese salvage specialists have come up with a variety of theories about how best to free the Ever Given, a formidable technical challenge complicated by bad weather. Nippon Salvage, which is part of the rescue efforts, declined to comment.
An official at Shoei Kisen Kaisha, the Japanese owner of the Ever Given, said it aimed to drive the container ship away, but added that resolving the situation remained “extremely difficult.”
“The market is betting that the problem will take some time,” said Kim Youngho, an analyst at Samsung Securities. “If you make a detour to the Cape of Good Hope, it will probably take at least another week to get to the Netherlands from Shanghai. If you have to make a detour, this should further increase current freight rates.” “
Ocean Network Express, a joint venture between Japan’s three largest shipping companies, said that although no rerouting decision had been made, the situation was being closely monitored.
Mitsui OSK Lines, which has four tankers of chemical and steel materials trapped in Suez, said it is not considering diverting ships in the hope that the situation can be resolved within two weeks.
Reporting by Leo Lewis and Kana Inagaki in Tokyo, Song Jung-a in Seoul, Hudson Lockett and Nicolle Liu in Hong Kong and Stefania Palma in Singapore