Container shipping diversions via Cape of Good Hope

[railfan99]

Given the geopolitical situation in the Red Sea with a Maersk container ship having been attacked by missiles (fortunately 'collected' by USA warships, good on them) and consequent diversions via Cape of Good Hope adding many days to transit times in lieu of the normal Suez Canal route, is there any suggestion that supplies of anything we could think of will eventually start to run low in the UK?

Will this adversely affect manufacturing in the UK as they wait for spare or other needed parts, supermarket stocks or anything else?

 

[AlastairFraser]

Given the geopolitical situation in the Red Sea with a Maersk container ship having been attacked by missiles (fortunately 'collected' by USA warships, good on them) and consequent diversions via Cape of Good Hope adding many days to transit times in lieu of the normal Suez Canal route, is there any suggestion that supplies of anything we could think of will eventually start to run low in the UK?

Will this adversely affect manufacturing in the UK as they wait for spare or other needed parts, supermarket stocks or anything else?

The only conceivable issue I could think of is with imported manufactured goods and steel from China,

However, if it started becoming a serious problem, the UK has an airbase in Cyprus with fighters (Typhoons) that have enough range to guard the problem areas, plus a detachment of tankers to keep them in the air and maritime recon planes to survey the situation.
There's also a significant Royal Navy detachment stationed in Oman even closer.

 

[DelW]

"Next" (a UK clothing retailer) is quoted by the BBC as warning that there may be consequential effects on stock availability, though in general rather than specific terms so far.

Next warns of supply delays due to Red Sea shipping attacks

The retailer reports strong sales but says disruption to shipping is "likely" to delay its stock.

www.bbc.co.uk

Next has warned supplies of its products could be delayed if disruption to shipping in the Red Sea continues.

Attacks by Houthi rebels on vessels in one of the world's busiest shipping lanes have resulted in firms avoiding the area and taking longer routes.

Next said if access "difficulties" continue, delays to stock deliveries to the UK were "likely" early this year.

 

[Magdalia]

There will be an impact on UK imports of many consumer goods manufactured in the Far East. As Next have already indicated, clothing is a good example. Another is consumer electronics.

Food supply is unlikely to be a significant issue, though could affect, for example, rice and tea.

But most important will be the impact on global supplies and prices of oil and liquefied natural gas.

 

[Shaw S Hunter]

There will be an impact on UK imports of many consumer goods manufactured in the Far East. As Next have already indicated, clothing is a good example. Another is consumer electronics.

Food supply is unlikely to be a significant issue, though could affect, for example, rice and tea.

But most important will be the impact on global supplies and prices of oil and liquefied natural gas.

According to various news reports yesterday tea supplies are already being affected, at least for independent/specialist suppliers.

 

[Camberman]

There will be an impact on UK imports of many consumer goods manufactured in the Far East. As Next have already indicated, clothing is a good example. Another is consumer electronics.

Food supply is unlikely to be a significant issue, though could affect, for example, rice and tea.

But most important will be the impact on global supplies and prices of oil and liquefied natural gas.

I'm sure the prices of all goods will unfortunately increase...

 

[yorksrob]

I'm sure the prices of all goods will unfortunately increase...

That will be another excuse to hike up housing housing costs to supposedly "control" inflation (even though it will just damage the economy and do nothing to tackle the root cause of the inflation).

 

[railfan99]

Given the geopolitical situation in the Red Sea with a Maersk container ship having been attacked by missiles (fortunately 'collected' by USA warships, good on them) and consequent diversions via Cape of Good Hope adding many days to transit times in lieu of the normal Suez Canal route, is there any suggestion that supplies of anything we could think of will eventually start to run low in the UK?

Will this adversely affect manufacturing in the UK as they wait for spare or other needed parts, supermarket stocks or anything else?

https://www.reuters.com/world/middle-east/maersk-diverts-vessels-away-red-sea-for-foreseeable-future-2024-01-05/

Apologies: at the time, I omitted a link, so here's a more recent story.

 

[Magdalia]

There was an item on this on Radio 4's You and Yours consumer programme today.

In addition to rice and tea, two other products specifically mentioned were palm oil and packaging goods. I presume that the latter means cardboard boxes.

 

[PeterC]

There was an item on this on Radio 4's You and Yours consumer programme today.

In addition to rice and tea, two other products specifically mentioned were palm oil and packaging goods. I presume that the latter means cardboard boxes.

On the BBC news page as well. I am afraid that I am finding it difficult to be sympathetic over the container load of Valentines Day tat that isn't expected before February 15.

 

[Magdalia]

I missed the first broadcast of Radio 4's More or Less on Wednesday, and have just caught up on the Friday repeat broadcast.

This included a feature on the diversion of container shipping via the Cape of Good Hope with some interesting statistics. I wasn't making notes so I hope that I've remembered them correctly!

• about 1 in 5 of all international container movements by sea usually go through the Suez Canal
• to run a weekly container service between the Far East and Europe requires 14 ships via the Suez Canal but 3 more ships when the route is via the Cape of Good Hope
• the fuel costs of a journey via the Suez Canal is about $3m and this goes up to about $4m via the Cape if Good Hope
• about 90% of container movements that usually go through the Suez Canal are currently diverted via the Cape of Good Hope
• as a result the cost of getting a container from the Far East to Europe had risen from about $2k to about $6k, part of the increase being a "risk premium"

 

[railfan99]

What about categories like hardware where many items are made in mainland communist China?

Are stocks of these starting to at least slightly reduce in UK's major and smaller hardware chains, even though they may not operate on a 'just in time' model?

 

[AlastairFraser]

What about categories like hardware where many items are made in mainland communist China?

Are stocks of these starting to at least slightly reduce in UK's major and smaller hardware chains, even though they may not operate on a 'just in time' model?

It would be prudent to note that mainland China has the potential of utilising the Yiwu-London freight route for higher value shipments.

 

[Magdalia]

What about categories like hardware where many items are made in mainland communist China?

Are stocks of these starting to at least slightly reduce in UK's major and smaller hardware chains, even though they may not operate on a 'just in time' model?

The impact of increased delivery times on supply chains is insignificant compared to the massive increase in the cost of shipping.

And the increase in the cost of shipping doesn't just affect what usually goes through the Suez Canal, that will be global. In the short term the elasticity of supply of container vessels is effectively zero. Increasing a weekly Far East-Europe run from 14 to 17 vessels is only going to happen by taking vessels from other less lucrative routes, where container costs will also then rise because capacity is reduced.

The volume effect of the price change will be at the margin, on shipments that were economically viable at the old price of shipping, but not at the new price. Again, that will be global, not just movements that usually go through the Suez Canal.

 

[railfan99]

Increasing a weekly Far East-Europe run from 14 to 17 vessels is only going to happen by taking vessels from other less lucrative routes, where container costs will also then rise because capacity is reduced.

That's a very good point, and has been briefly discussed in the Australian business media.

By and large, the limited media I've seen suggests container shipping lines can make more money on say European routes than they can to/from Australia. Latter is compounded by an on again-off again strike we have at a port operator with a 40 per cent market share.

 

[randyrippley]

The only conceivable issue I could think of is with imported manufactured goods and steel from China,

However, if it started becoming a serious problem, the UK has an airbase in Cyprus with fighters (Typhoons) that have enough range to guard the problem areas, plus a detachment of tankers to keep them in the air and maritime recon planes to survey the situation.
There's also a significant Royal Navy detachment stationed in Oman even closer.

A return trip Cyprus - Yemen is around 3,300 miles. For a Typhoon that equates to something like 8-9 hours transit time in a single seat aircraft plus any time spent on patrol. That's a hell of a workload on the pilot. It also means you're probably limited to around one hour maximum on patrol. All we've got based at Cyprus are around five or six Typhoons - we can't spare any more from other duties such as UK air defence. So if you assume you need two aircraft on patrol at all times you need a minimum of around 20 plus hot spares. That's around a quarter of our actual flyable Typhoon fleet. Absolutely impossible idea.
Similar considerations apply to our "maritime recon" fleet of P8 Poseidons. We only have eight, all would be needed to carry out effective patrol over the target area. A problem made worse by the fact that they can't use our hose-and-drogue air-to-air refueling system: the Americans would have to supply any tankers. In reality we need all the P8s for chasing Russian subs in the North Atlantic to keep our Trident subs safe.

 

[AlastairFraser]

A return trip Cyprus - Yemen is around 3,300 miles. For a Typhoon that equates to something like 8-9 hours transit time in a single seat aircraft plus any time spent on patrol. That's a hell of a workload on the pilot. It also means you're probably limited to around one hour maximum on patrol. All we've got based at Cyprus are around five or six Typhoons - we can't spare any more from other duties such as UK air defence. So if you assume you need two aircraft on patrol at all times you need a minimum of around 20 plus hot spares. That's around a quarter of our actual flyable Typhoon fleet. Absolutely impossible idea.
Similar considerations apply to our "maritime recon" fleet of P8 Poseidons. We only have eight, all would be needed to carry out effective patrol over the target area. A problem made worse by the fact that they can't use our hose-and-drogue air-to-air refueling system: the Americans would have to supply any tankers. In reality we need all the P8s for chasing Russian subs in the North Atlantic to keep our Trident subs safe.

1) I believe we can land at airbases in the UAE to refuel and prepare, so it wouldn't necessarily mean such an intensive mission load.
2) The recent Houthi bombing raids didn't require a massive detachment of aircraft. The aim of such a mission would be periodic suppression, not total annihilation, so would not need your proposed 20 aircraft plus spares.
3) If what you say about the maritime recon aircraft is true, then we urgently need to expand the fleet.

 

[edwin_m]

It would be prudent to note that mainland China has the potential of utilising the Yiwu-London freight route for higher value shipments.

A web search suggests this still runs through Russia, which would make it nearly as vulnerable to international tensions as the Suez shipping route. Any alternative overland route would also have political risks and I imagine much lower capacity.

Note also that the ships on this route each carry about 20000 Twenty Foot Equivalent (TEU) of containers, which is around 90 mile-long freight trains or about 60 if double-stack is possible. So a high capacity rail route would be needed to make a significant dent in the shipping flows.

 

[D7666]

Note also that the ships on this route each carry about 20000 Twenty Foot Equivalent (TEU) of containers, which is around 90 mile-long freight trains or about 60 if double-stack is possible. So a high capacity rail route would be needed to make a significant dent in the shipping flows.

+

• to run a weekly container service between the Far East and Europe requires 14 ships via the Suez Canal but 3 more ships when the route is via the Cape of Good Hope

= to run with the same weekly throughput as Suez you need 90 x 14 1260 miles of train all following each other in a continuous operation ..................

................ which is all probably why they don't do it, with or without tensions in Russia or anywhere else ........... And there are a delete expletive sight more than one weekly such boat to EU ports.

If just one of those boat loads was GB destination, to get those 90 trains alone through the channel tunnel requires 12-13 a day, 7 days a week. But since we can't handle mile long trains - what is our limit - 750 m ??????? (that is a question not a statement) - need 180 trains = 1 an hour, every day, 7 days a week.

Much as like to see such a thing, I am somewhat sceptical that MDTR is capable of such an activity in anything resembling a timely manner.

 

[AlastairFraser]

A web search suggests this still runs through Russia, which would make it nearly as vulnerable to international tensions as the Suez shipping route. Any alternative overland route would also have political risks and I imagine much lower capacity.

Note also that the ships on this route each carry about 20000 Twenty Foot Equivalent (TEU) of containers, which is around 90 mile-long freight trains or about 60 if double-stack is possible. So a high capacity rail route would be needed to make a significant dent in the shipping flows.

You make some fair points, but it could carry a significant amount of the high value electronic shipments, which only form a small part of the total container ship consignment (as I understand it) and are not seriously time sensitive.

 

[edwin_m]

You make some fair points, but it could carry a significant amount of the high value electronic shipments, which only form a small part of the total container ship consignment (as I understand it) and are not seriously time sensitive.

These might well be subject to export controls, and therefore presumably not able to transit through Russia.

 

[D7666]

You make some fair points, but it could carry a significant amount of the high value electronic shipments, which only form a small part of the total container ship consignment (as I understand it) and are not seriously time sensitive.

But high value and therefore more likely to be subject of theft on route. Especially if it is known such trains only ran only carrying such goods, and as such become targets. Either by "simple" theft - or contrived disruption from supporters of the same cause of problems in the Red Sea.

The main issue, though, right now, and has been pointed out already by others, the land route always crosses Russia /somewhere/ or one of their allies.

 

[Chester1]

A web search suggests this still runs through Russia, which would make it nearly as vulnerable to international tensions as the Suez shipping route. Any alternative overland route would also have political risks and I imagine much lower capacity.

Note also that the ships on this route each carry about 20000 Twenty Foot Equivalent (TEU) of containers, which is around 90 mile-long freight trains or about 60 if double-stack is possible. So a high capacity rail route would be needed to make a significant dent in the shipping flows.

If an agreement can be reach between Armenia and Azerbaijan over the Zangezur corridor the geopolitics of cross asia land transportation would change very quickly. Unfortunately the recent war removed the most obvious permanent solution of a land swap. A route between EU and China controlled only by Turkic countries would be a game changer. The infrastructure would take a while to build!

 

[edwin_m]

If an agreement can be reach between Armenia and Azerbaijan over the Zangezur corridor the geopolitics of cross asia land transportation would change very quickly. Unfortunately the recent war removed the most obvious permanent solution of a land swap. A route between EU and China controlled only by Turkic countries would be a game changer. The infrastructure would take a while to build!

They would still have to get across the Bosphorus, only possible between the commuter trains in the Marmaray tunnel or with some sort of ferry. And another ferry would be needed over the Caspian, or a transit through Iran. This isn't looking to me like a high-volume corridor, and the political risks make it unlikely anyone would invest in making it so.

One of the purposes of Gulf Co-operation Council rail is to link the Gulf states to Muscat, avoiding sea transit through the Straits of Hormuz. In conjunction with the Riyadh-Jeddah proposal it would also provide a landbridge, though a rather indirect one, between Jeddah and Muscat to avoid the Bab Al-Mandeb. Linking the Saudi network to the Mediterranean to avoid the Suez Canal would involve passing through Israel or Syria.

 

[stuu]

If an agreement can be reach between Armenia and Azerbaijan over the Zangezur corridor the geopolitics of cross asia land transportation would change very quickly. Unfortunately the recent war removed the most obvious permanent solution of a land swap. A route between EU and China controlled only by Turkic countries would be a game changer. The infrastructure would take a while to build!

The fairly new Turkey-Georgia line provides a route around that, although probably not in any sort of volume. There was supposed to be an Istanbul-Baku through train for passengers too, but I don't think that has ever actually happened

 

[DanNCL]

It would be prudent to note that mainland China has the potential of utilising the Yiwu-London freight route for higher value shipments.

Is that still running despite the current sanctions against Russia and Belarus? I was of the impression that the vast majority of freight traffic across the EU/Belarus border had been stopped. Happy to be corrected if I’m wrong though!

 

[cactustwirly]

I know container rates have quadrupled and are likely to stay high for a while, this will affect the availability and cost of a lot of products across Europe. Expect inflation to start increasing as shipping costs are passed onto the consumer.

Even though something might be manufactured in the UK or Europe, a lot of the raw materials come from the far east. Palm oil for example is used in lots of products from Soap and Shampoo, to a lot of food products.

 

[AlastairFraser]

These might well be subject to export controls, and therefore presumably not able to transit through Russia.

Perhaps, although I'm not sure the system is rigorous enough to stop it.

But high value and therefore more likely to be subject of theft on route. Especially if it is known such trains only ran only carrying such goods, and as such become targets. Either by "simple" theft - or contrived disruption from supporters of the same cause of problems in the Red Sea.

The main issue, though, right now, and has been pointed out already by others, the land route always crosses Russia /somewhere/ or one of their allies.

Shrinkage is a big issue whatever shipping mode you choose, to be honest.
No Iranian allied militias come anywhere near the route, the closest you get is Kazakhstan and the autocratic government there would annihilate any militants who wished to cause trouble.
As for going through Iran itself and Turkey as a route, that would avoid Russia and provide a way to get Iran tilting closer to Europe again after the unwelcome intervention of a certain orange tanned Yankee to dissolve our previous relatively functional relationship...

Is that still running despite the current sanctions against Russia and Belarus? I was of the impression that the vast majority of freight traffic across the EU/Belarus border had been stopped. Happy to be corrected if I’m wrong though!

It's difficult to find information, but you may be right.

 

[Lost property]

A return trip Cyprus - Yemen is around 3,300 miles. For a Typhoon that equates to something like 8-9 hours transit time in a single seat aircraft plus any time spent on patrol. That's a hell of a workload on the pilot. It also means you're probably limited to around one hour maximum on patrol. All we've got based at Cyprus are around five or six Typhoons - we can't spare any more from other duties such as UK air defence. So if you assume you need two aircraft on patrol at all times you need a minimum of around 20 plus hot spares. That's around a quarter of our actual flyable Typhoon fleet. Absolutely impossible idea.
Similar considerations apply to our "maritime recon" fleet of P8 Poseidons. We only have eight, all would be needed to carry out effective patrol over the target area. A problem made worse by the fact that they can't use our hose-and-drogue air-to-air refueling system: the Americans would have to supply any tankers. In reality we need all the P8s for chasing Russian subs in the North Atlantic to keep our Trident subs safe.

Very refreshing to read a post that clearly understands the practical issues involved along with the logistics.

 

[railfan99]

This is from www.afr.com:
"The number of containers that are carried on ships through the canal more than halved during December and is running almost 70 per cent below usual volumes, according to the Kiel Institute, a German research group.
Current volumes are about 200,000 containers a day, down from 500,000 in November, reports Kiel, which says the Red Sea attacks contributed to a 1.3 per cent drop in global trade between November and December...

...
The number of containers that are carried on ships through the canal more than halved during December and is running almost 70 per cent below usual volumes, according to the Kiel Institute, a German research group.
Current volumes are about 200,000 containers a day, down from 500,000 in November, reports Kiel, which says the Red Sea attacks contributed to a 1.3 per cent drop in global trade between November and December..."