Shippers accuse carriers of price gouging


Shippers and forwarders are becoming increasingly concerned about carrier price gouging on the Asia to Europe services citing massive increases in charges that are being merged into a single charge from January.

According to one forwarder, who wanted to remain anonymous, carriers are citing increases for a peak season surcharge, increased fuel charges and security surcharges that have all been created due to the Red Sea shipping crisis.

“In December we were being quoted $1,400/FEU by carriers from January that will be $5,200/FEU and $4,000 for a 20ft, and we are being told to expect $12-15,000/FEU after Chinese New Year at the end of January,” said the forwarder.

He said it was uncertain how these charges were going to be levied at this point, whether the security surcharges would be levied for vessels heading around the Cape, or if extra fuel charges were still being made for vessels still transiting the Suez Canal.

December freight rates have all been honoured, said the forwarder, but Maersk announced on 24 December that it will resume services through Suez.

“As of Sunday 24 December 2023, we have received confirmation that the previously announced multi-national security initiative Operation Prosperity Guardian (OPG) has now been set up and deployed to allow maritime commerce to pass through the Red Sea / Gulf of Aden and once again return to using the Suez Canal as a gateway between Asia and Europe,” said a Maersk advisory.

However, the forwarder remained unconvinced: “There is no peak season, the shipping lines have created a peak season,” he claimed.

That is a view that was supported by Xeneta’s chief analyst Peter Sand, who told Container News: “I don’t see a capacity crunch, the market is stretched with carriers going around the Cape [of Good Hope] but to see a capacity crunch we would need to see Suez and Panama close.”

Sand pointed out that in the pre-Covid days an Asia to Europe loop consisted of just eight ships, today some loops have 14 vessels deployed.

Carriers are deploying a number of tactics to limit capacity, including adding extra port calls, slow steaming, blanking sailings and using the Cape to extend journeys, but with the number of new vessels being deployed and the level of demand there is “ample capacity,” said Sand.

Red Sea attacks on shipping have caused vessels to divert around the African Cape to avoid the regional conflict in the Middle East, prompting some observers to warn of higher rates and a shortage of capacity.

Global Shippers’ Forum director James Hookham was more guarded on his view of the current situation, saying that it was clear that some ships will be delayed after diverting via southern Africa, but these ships remain on the water so it’s unclear how this will play out.

Like the forwarder, Hookham suggests that the peak season claim by the lines remains fanciful: “Demand is still flat, global trade is in decline if anything,” he said, while also pointing out that the carriers are running more ships, “But those ships’ utilisation rates are low, at around 70%, it’s like running a train service, the trains are often operated with a few people on board.”

Carriers still sending ships via Suez


Vessel tracking shows over 80 container ships still transiting the Red Sea and Suez Canal even after the raised threat from the Houthi Movement, which has warned it will target vessels connected to Israel.

Houthi leaders have reportedly said that they would target shipping until Israel allows aid into Gaza and stops bombing its population, with the latest news from the UN that a vote will take place on a ceasefire. Although the UN proposal is supported by the US, it remains to be seen whether this will be enough to stop the Houthi group from targeting commercial shipping in the Bab al-Mandeb strait.

With a large number of container ships still operating in the region, many from the top ten carriers, including COSCO, ONE, Wan Hai, Maersk, CMA CGM and MSC and some ultra-large container vessels (ULCVs), the Houthis will not be short of targets.

Container News contacted the three largest container vessel operators, all of which have vessels in the Suez Canal or the Red Sea, as tracked on VesselsValue AIS.

A spokesman of CMA CGM said the French shipping company “is working in close co-operation with the appropriate authorities and is working on the appropriate safety measures with them.”

He pointed out that while it would be difficult to outline the security measures under discussion, the actions being taken are to protect crew, vessels and freight on board its ships.

Maersk also responded to requests for clarification following its announcement, like CMA CGM and others that all its vessels would be re-routed until the Suez Canal route was again safe.

Pointing to Maersk’s 19 December statement which said, “Having monitored developments closely and retrieved all available intelligence, Maersk has decided that all vessels previously paused and due to sail through the region will now be re-routed around Africa via the Cape of Good Hope for safety reasons.”

However, a Maersk spokesman also highlighted that some of its vessels operate under the trading name of Maersk Line Limited, which handles freight for the US Government and “is not part of Maersk Line’s overall offering”.

The US has assembled a multi-national naval force to protect commercial shipping in the Gulf of Aden and Bab al-Mandeb, in what it calls Operation Prosperity Guardian. Greece and Denmark are the most recent additions to the force, which includes Spain, Italy, the United Kingdom, Canada, the Seychelles and others.

Air Force Maj. Gen. Pat Ryder at a Pentagon press conference said, "It's very important to understand that the Houthis aren't attacking just one country, they're really attacking the international community."

He added, "They are attacking the economic well-being and prosperity of nations around the world. So, in effect, they really become bandits along the international highway that is the Red Sea."

Greece has sent a frigate to join the international force with the Greek defence minister, Nikos Dendias, saying, "The frigate will participate in the multinational operation 'Prosperity Guardian', for the protection of merchant ships, the lives of seafarers, and the global economy."

Missile attacks threaten global supply chain crisis at Suez Canal: Two boxships attacked, one on fire


Missile and drone attacks by Houthi militia on merchant ships passing through the Red Sea and Gulf of Aden could trigger a global supply chain crisis.

The latest attack was reported today (15 December) on the Liberian-flagged 14,993 TEU container ship Al Jasrah, operated by Hapag-Lloyd, in the Red Sea. The vessel sustained damage from the missile attack as it was sailing through the Bab al-Mandab strait, causing a fire on deck and a container to fall overboard, said the British maritime security firm Ambrey.

Another attack was reported yesterday (14 December), when a missile was fired at the 10,100 TEU container ship Maersk Gibraltar. The missile did not strike the ship, which was sailing from the port of Salalah in Oman to the port of Jeddah in Saudi Arabia.

This follows a string of attacks including missile strikes on a Norwegian-flagged vessel in the Bab el-Mandeb Strait and a container ship operating between Asia and the Mediterranean. On 12 December, a vessel operated by shipping company Ardmore came under missile attack in the Red Sea.

Peter Sand, chief analyst at Xeneta, an ocean freight shipping data and intelligence platform, believes the situation could have serious consequences for global supply chains.

"All ships transiting the Suez Canal must sail through the Red Sea and Gulf of Aden and the Houthi militia has made clear that any vessel is a target. I do not believe the Suez Canal will close, however, if there are further significant escalations then we cannot rule it out, even if it is just for a few days," he said.

Sand mentioned that a closure of the Suez Canal could have a severe impact on the global shipping industry, recalling the Ever Given incident and its consequences. "The ocean freight industry has been deeply scarred by Ever Given and is frankly terrified of any situation which threatens the closure of the Suez Canal," he pointed out.

More than 50 vessels transit the Suez Canal every day, carrying billions of dollars of goods to North Europe, the Mediterranean and North America East Coast. Houthi militia in Yemen, which has stated sympathies with Hamas and according to the US Government, are being armed by Iran, has claimed the missile and drone attacks on merchant ships are in response to the conflict in Gaza.

With ongoing restrictions in the Panama Canal due to drought, the latest situation in Suez could not come at a worse time for the ocean shipping industry, according to Xeneta analysis.

Sand said, “We are already seeing ocean freight liner operators and owners choosing to reroute vessels away from the Red Sea and Gulf of Aden region. Due to the importance of the Suez Canal to global supply chains, even a small disruption can have big consequences.

“The main alternative is to sail around the Cape of Good Hope, which adds up to 10 days sailing time for services from Asia to North Europe and East Mediterranean.

“We may also see the cost of moving freight by ocean increase dramatically. Depending on the scale and duration of any disruption at the Suez Canal, we could see ocean freight shipping rates increase by anything up to 100%.”

Maersk to deploy first large methanol-enabled ship on Asia – Europe trade lane


Maersk will launch the first of its 18 large methanol-enabled vessels currently on order, deploying it on the AE7 service string connecting Asia and Europe.

On 9 February 2024, the ship will enter service on the AE7 string, which includes port calls in Shanghai, Tanjung Pelepas, Colombo and Hamburg with Ningbo being its first destination.

The AE7 string has the following port rotation:

Ningbo (China), Shanghai (China), Nansha (China), Yantian (China), Tanjung Pelepas (Malaysia), Colombo (Sri Lanka), Port Tangiers (Morocco), Felixstowe (UK), Hamburg (Germany), Antwerp (Belgium), London Gateway (UK), Le Havre (France), Port Tangiers, Jeddah (Saudi Arabia), Abu Dhabi (UAE), Jebel Ali (UAE)

The container vessel built by South Korean shipbuilder Hyundai Heavy Industries (HHI) has a nominal capacity of 16,000 TEUs and is equipped with a dual-fuel engine enabling operations on methanol as well as biodiesel and conventional bunker fuel.

The Danish ocean carrier has set a Net-Zero greenhouse gas emissions target for 2040 across the entire business and has also set tangible and ambitious near-term targets for 2030 to ensure progress. Maersk has secured sufficient green methanol to cover the vessel’s maiden voyage and continues to work on 2024-25 sourcing solutions for its methanol-enabled vessel fleet.

“Deploying the first of our large methanol-enabled vessels on one of the world’s largest trade lanes, Asia - Europe, is a landmark in our journey towards our Net-Zero target. With the vessel’s capacity of 16,000 containers, this will make a significant impact in our customers’ efforts to decarbonise their supply chains, and we are looking forward to introducing more methanol-enabled vessels on this and other trades during 2024,” commented Karsten Kildahl, chief commercial officer at Maersk.

Ahead of its deployment, the vessel will be named at the shipyard at the end of January 2024. The following two sister vessels will be deployed in the first half of the next year with naming events taking place in Yokohama, Japan, and Los Angeles, US.

Maersk expects to take delivery of four additional sister vessels in the second half of 2024.

At the time of deployment of the first large vessel, it will be the only second container vessel in the world that can sail on green methanol, the first being the feeder vessel Laura Maersk which entered service in September this year.

Maersk has currently 24 container vessels on order with dual-fuel engines and able to operate on green methanol. Twelve of the ships will have 16,000 TEU of container capacity, six will have 17,000 TEU capacity and six will be able to carry 9,000 TEUs.

Boxships now hit by Panama Canal crossing restrictions


Container ships are now being held up in the Panama Canal as the number of transit slots for such vessels will be reduced from 1 January 2024, according to Linerlytica’s report.

Linerlytica noted that congestion at the Panama Canal is starting to build up with 22 container ships waiting at the end of last week, of which 14 are neo-panamax vessels. Several carriers have already announced new fees for Panama transits including MSC who will impose a US$297/container Panama Canal Surcharges (PCS) from 15 December.

Until now, container ships had not been affected by the transit limits, which were effected to manage the drop in water levels due to droughts. This was because priority was given to vessels on liner services.

However, the Panama Canal Authority is taking drastic measures, reducing the number of daily neo-panamax transit slots on the canal from eight to five from January 2024, with a weekly limit of 35 transits.

Boxships currently account for 29 weekly neo-panamax transits (before adjustment for blanked sailings) of which 18 are northbound voyages (to the US) and 11 are southbound (from the US). These transits account for 83% of the January transit quota, leaving just 17% of these slots to non-container ships.

In February next year, the transits will be reduced further to 18 a day, with neo-panamax transits to be restricted to five a day.

As of 26 November, 22 container ships of 190,000 TEUs are waiting at the Panama Canal anchorage, the highest number recorded so far, of which 14 are neo-Panamax units.

Linerlytica said, “The situation will worsen over the coming two months as the new transit quotas kick in while ongoing protests have also affected landside access at some of the Panamanian ports.”