Shipping companies from multiple countries have contacted the US Navy about the potentially elevated threat of piracy to rerouted vessels after a container ship ran aground and blocked the Suez Canal.
The incident, which salvage experts indicated could take weeks to resolve, has forced the industry to contemplate anchoring billions of dollars of cargo at sea or take lengthy — and potentially risky — routes around Africa.
A spokesperson for the US Navy’s Fifth Fleet told the Financial Times the blockage had prompted a series of inquires over the past two days from global shipping companies over 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 that potentially rerouting vessels included security considerations.
“Africa has the risk of piracy, especially in east Africa,” he said, adding that shippers may need to hire extra security officers.
Willy Lin, chair of the Hong Kong Shippers’ Council, said that because of piracy on the African route, naval warships from different countries might be needed to protect ships in the area.
The warnings came as shares in Asian shipping operators jumped on Friday on the prospect of higher freight rates, as industry executives contemplated rerouting cargo around southern Africa, which would add at least seven days and significant costs to journeys.
China’s Cosco Shipping and South Korea’s Hyundai Merchant Marine led the stock price surge in Asia, with almost 10 per cent increases after salvage experts indicated it could take weeks to dislodge the 400-metre Ever Given container ship from the banks of the Suez Canal.
While east Africa has long been known for piracy, there has been a surge in kidnappings at sea and other maritime crimes in west Africa in recent months.
The US Navy said there had not yet been an impact on naval operations in the region, but companies were concerned that if the blockage continued, their vessels could face risks.
James Wroe, head of liner operations at Maersk Asia Pacific, wrote on social media that the decision of whether to reroute was a “roll of the dice”.
Hyundai Merchant Marine has already diverted the Hyundai Prestige, which is sailing from Southampton to Laem Chabang in Thailand, to bypass the Suez Canal and travel around South Africa’s Cape of Good Hope. Shipbrokers in Singapore and Tokyo said similar rerouting decisions were “imminent” on a number of oil tankers and other vessels.
Vessels travelling from Singapore to Rotterdam via the Cape of Good Hope faced additional costs of $400,000 per vessel for a full voyage said Anoop Singh, head of tanker research at shipbroker Braemar ACM.
Shipping companies estimated that almost 200 vessels were stranded on either side of the Suez, the chokepoint through which about 12 per cent of global trade flows. The route is critical for oil, gas and high-demand food commodities such as coffee.
Dutch and Japanese salvage specialists have produced a variety of theories for how best to free the Ever Given, a formidable technical challenge that has been complicated by poor 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 was focusing on dislodging the container ship but added that resolving the situation remained “extremely difficult”.
“The market is betting that the issue might go on for a while,” said Kim Youngho, an analyst at Samsung Securities. “If you detour to the Cape of Good Hope, it will probably take at least one more week to reach the Netherlands from Shanghai . . . if you have to detour it should raise current freight rates further.”
Ocean Network Express, a joint venture between Japan’s three largest shipping companies, said that while nothing had been decided regarding rerouting, the situation was being closely monitored.
Mitsui OSK Lines, which has four tankers carrying chemical and steel materials stuck at Suez, said it was not considering rerouting ships in the hope the situation could 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