Ships rerouted to avoid Suez Canal for safety issues

More than 100 container ships were rerouted near southern Africa so
that they could avoid the Suez Canal due to safety issues.

Servest Marine MD Andrew Hendrikse discusses this further.

Tune into Newzroom Afrika DStv channel 405 for more.

Let’s take a look at this now uh fighting on the Red Sea has meant that the shortest route between Asia and Europe is interrupted this does though present an opportunity or does it for the African continent as shipping containers have had to reroot and come

All the way down to the Cape of Good Hope and that’s right here at our doorstep we take a look at this now as more than 100 container ships were rerooted near southern Africa so they could avoid the sewers Canal due to safety issues we’re joined by Andrew

Hendricker who is a managing director at service serviced Marine that’s correct uh thank you very much uh Andrew for your time this afternoon perhaps let’s start with this you can help us make sense of what is going on by helping us understand where you fit in in the bigger

Picture Jud thank you so much for having me on the air and it’s a pleasure to be here I think just just to give a broader context uh I think we need to first of all understand the impact globally that this has if you consider that about 15%

Of all World Trade goes through the SE canal and that’s a huge amount of shipping that happens that goes via that that conduit um if if you consider that’s about 20,000 ships a year that go through the SE canal and at the moment those numbers have dropped by about 45%

Due to the current crisis in Red Sea um if you consider what that means just from a logistics perspective and from an operational perspective if you were a ship owner you’d have to make the voyage of an extra 5,000 kilometers around the Cape of Good Hope this takes about a

Week to 10 days additional time so that means that everything is delayed all all the the the schedules that youve have established for for your shipping lines have have now been disrupted and are running behind schedule um there’s obviously a additional costs because you know a ship

Doing 5,000 mil 5,000 km sorry would need additional fuel so the fuel costs will increase by the reckon average Vel that’s doing a voage of that nature um carrying containers would need an additional excess of a million us just in fuel then there’s all the other logistics and operational aspects to it

As well like your crewing costs your repairs and maintenance schedules which would have to be um which would now mean that 12 days or 10 days more see would me those costs would have to be part of that particular Voyage um and then of course your insurances are going to

Increase so all of these costs um have a massive impact um at a time when we’ve been seeing um shipping container rates and other shipping rates dropped quite significantly in the last 18 months which been great because it has had an inflationary um positive effect has helped inflation drop um worldwide um

With shipping rates dropping and all of a sudden you’re going back to where you were trying to going back to where you’re seeing shipping rates more than double around the cape um sh some lines put SE charges on over 100% so it really has a massive impact just on the costs

Worldwide of shipping um then you have a look and see exactly how it’s impacting here um around the African coast and obviously for us we see it maybe as a windfall but you know in some respects um if you talk to agents and and and um launch operators like service which do

Opl which is off Port limits services to ships passing the South African Coast we have seen an increase in in inquiries and requests for services we’ve actually seen physical increase in activity um particularly around bunkering now that’s the main concern for most of these shipping ship owners they’re saying we

Need more fuel this is a much longer trip we need fuel now where are we going to get those fuel on on that Voyage around the cap the obvious places here in South Africa but you South Africa has three ports where we can off offer um banking services those ports are under

Stress already um um so so you can have cap Cape Town you have turban you have Richard’s Bay available to give to give bunkering which is fuel Ser to to ships passing by that have to come into port to get those fuel um delivered to the that vessel the ports are congested so

That’s a problem then you have com other parts of Africa where they can take two other ports in Africa which are becoming quite favorable and competing again South Africa you’re looking at maias at Port Louis very popular they also have tankers offshore that means they can transfer fuel without even having to go

Into Port there um there’s also Mutu um in mosm Beek Luanda in Angola and of course walus Bay in Namibia also offering banking services so all these ports are looking to actually get that bit of business which could be seen as a windfall for them over this period we

Don’t know how long this could last this could take months we don’t know I know that the top 18 shipping lines um have said that they are diverting their vessels via the C all right um two of those go ahead sure Andrew what what are we hearing from you essentially that

This is a missed opportunity for South Africa because according to the World Bank and S&P Global Market intelligence 2022 container Port performance index the Durban port and the Cape Town Port were ranked poorly um coming in almost towards the end correct I mean we were German was I

Think fourth wor Port as far as efficiencies go in in last year’s indexes capwn wasn’t far behind um and and that called put pressure on vessels coming into our coming into our ports um has put pressure on making sure that our economy can flow with with with Goods

Coming exports and imports but of course it means that our ports are congested so vessels now want you to come in to take Bankers in Durban or in Cape Town um it’s it’s it’s going to cost First of all a lot of money it’s going to cost

About $35,000 just to come into Port once they import they’re not too there’s uncertainty how long it will take for that to be delivered to them how long when will the next T Boat be available to take them out of the port so there’s all these concerns and uncertainty which

Mean which means that this is an opportunity being missed to a large extent and especially if you look at what happened in aloa Bay I mean aloa Bay would have been the perfect place to take Bankers if you looked um at the middle of last year there were five

There were three um big tankers operating up the port of of uh of uh of Port Elizabeth of qua those tankers were doing what they call STS transfers of Bankers so a ship wouldn’t have to even come into Port they can come alongside the vessel um the big tanker take their

Fuel and move on um but unfortunately that that whole operations in PE which was absolutely perfect for this typ of scenario was was came to a halt um in in the in the second half of last year due to a dispute with SARS and the bank operators and that has not

Yet been resolved and there’s been lots of income for for many companies have had closed down in in in in in qua you you’ve had lots of people have been retrenched and a whole industry that was developing around servicing these vessels and there about 150 vessels a

Month that were being serviced has all come to a Hal in in K at the moment which is really a big you consider the opportunity that now has now how costly that opportunity be and maybe in answering that question let’s take a look at this because often times

We never understand the magnitude of a problem until it gets personal and so these ships that are re-rooting what is in those containers that will ultimately have an impact on you and I and we cannot even um what buffer the situation or create a buffer because here we are

Losing money when ships are just passing Us by you you have between there’s an estimate between 7,000 and up to 14,000 vessels that Parts the South African Coast every month regardless of the situation that’s happening in the SE canal and there’s such a a massive opportunity um you’re talking billions

Of dollars worth opportunity that’s just passing Us by every single month and this has been going on for for years and you know servest marine and other service operators launch service operators we do our best to try and attract along with that agents attract as much of that business as possible

That do doing crew changes doing giving Provisions supplies to vessels as they’re passing by and being as competitive as possible in an international market um and you know it’s you’re talking here probably tens of billions of dollars not even Rand worth of revenues that could be earned

If we manage to actually exploit our Global position and and create a real Hub with governments coming on board giving incentives to ship owners to use our to use our port and our offshore what we call opl off Port limits where you operate outside the port but you

Have activity from the port going out ships little boats going out launch Services going out and and meeting these paring vessels and giving them their supplies giving them fuel giving them fresh water um and doing crew changes this is you’re talking about International crew that are flying in

They’re staying in our hotels they are then being taken out to meet ships then obviously the there’s a crew change happening so the crew that was on board comes up goes to a hotel overnight then flies out of our country all of this activity at the moment is not been

Correctly exploited and it’s a it’s a really wasted opportunity and if we if we had our duck in a row right now we could really do do very well out of this in in the coming months um but in the long term um this this could be

Something that we need to be untapping um around our Coastline which department is responsible for this Department of Transport is is is is definitely um very much involved in this they’ve now formed the what they call the the BMA the the Border Management Authority and all the various government

Authorities and agencies that are to do with um managing our coastlines managing our the borders of South Africa are all part of this BMA and they and I’ve met with them and we we’re making good we’re making good progress in beginning to um liaz with them um to try and find ways

To work together and they are committed as well to see us grow so there’s is positive but you know it needs to happen now and it should have happened already um but but the B is really that the government agency with all the various players involved from um uh immigration

Customs um The Border Police um Department of Transport SS Etc they’re all part of this agency they’ve all for form part of this new agency that was formed during the course of last year okay sure we understand that one of the challenges at the Port of Cape Town at

Least is a lack of rubber tied Gand trees and engines what are rubber tired gantries and if and something so important how are we without it yeah this this is a different topic to what’s happening in the Red Sea because actually what’s happening in the Red Sea does not will not really impact

Um out the trade in and out of South Africa um but but getting to that question a a Gantry is basically if you can imagine a vehicle with wheels and it’s got It’s like almost it goes up 10 m into the air and in the middle of this

This this vehicle you can actually put a full container and and it picks up using a crane mechanism again a winch mechanism it picks up containers and moves moves them around inside the port or moves them from a vessel from a ship to the port and there’s a shortage of

These both in Cape Town and Durban and I know in Cape Town they’re busy getting some new ones re um into into the port that they that they procured and I know that they’ve actually managed to get some of the ones that were broken down because they were they were there but

They were broken down in both in deran and in Cape Town they managed to repair certain number of them in the last 3 months so things are improving but yet there’s there’s still a briak backlog um and a lot of work to be done in order to

Get the efficiencies up I hope that explains what a Gantry is rubber wheel Gantry sure um thank you very much we could actually um imagine it yeah thank you for your time Andrew unfortunately that’s all the time we can afford uh Andrew Hendrick says the man managing director at serviced Marine okay