by Lloyd's List
5 September (Lloyd's List) - THE fallout from the Red Sea crisis has led to a recalibration of discretionary box cargoes circulating in the region, with far-reaching consequences not just for local ports but for those much further afield too.
Shipping schedules and timetables on the lucrative east-west trades have experienced significant disruption, with carriers left with little choice but to skip sailings and limit port calls to maintain schedules.
An analysis of Lloyd’s List Intelligence vessel tracking data and port volume data through the first half of 2024 reveals the true extent of the effect on trade flows, as carriers continue their impromptu migration south around the Cape of Good Hope to avoid Houthi missiles and other weaponry.
For some ports, it has meant a welcome unprecedented uptick in business. For others, whose transhipment offering is no longer to the convenience of carriers serving east-west trades, its effect has been significantly negative, particularly those that rely on those all-important wayport calls.
Red Sea hubs
Understandably, transhipment hubs in the Red Sea have born the brunt. Earlier this year, Lloyd’s List reported how the Saudi ports of Jeddah and King Abdullah Port had seen sharp falls in traffic in the immediate aftermath of attacks.
With carriers still avoiding the Red Sea, the numbers at the halfway stage of the year point to a large scale-erosion of business across the respective quays.
KAP was built on the premise of the hub-and-spoke operation, relying on the constant flow of east-west trade to and from the Suez Canal to serve regional cargoes.
With only minimal deviation for carriers on the mainlane trades, KAP become one of the world’s fastest-growing ports over the past decade. But transhipment traffic represented about 90% of its box business and this has now been all but eradicated.
Lloyds’ List Intelligence shows that through the first six months of 2024, the combined sum of capacity calling KAP was down 88% compared with the first half of the past year. This included a 97.8% fall in ships with a capacity of 10,000 teu-15,000 teu from 183 in the past year to just four in 2024. In terms of 15,000+ teu units, only one such vessel called KAP in the first half of 2024, compared with 100 in the past year.
Although KAP does not publish half-year volume figures, this drastic drop from calls of ultra-large tonnage suggests equally extreme declines.
In the case of Jeddah, capacity reported by Lloyd’s List Intelligence arriving at the port was down nearly 70% in the six months ending June 30 against the past year.
Again, there was a notable absence in larger tonnage on 2023 levels. Ship calls in the 10,000 teu-15,000 teu class were recorded at just 28, down from 322 the previous year, representing a fall of 91%, while 15,000+ teu vessels fell in number from 35 to only four.
Jeddah’s decline in vessel calls, while significant, is not quite on the same scale as compatriot KAP. Gateway freight, which traditionally takes up a greater share of cargo composition, is still, at least to some degree, making its way through the port, with carriers ensuring coverage of Saudi Arabia and the Red Sea region with regular feeders from the Mediterranean via the Suez Canal.
The other option being used by carriers is via a land bridge from the east via the Arabian Gulf, a trend that has seen vessel activity increase at the Saudi port of Dammam.
Lloyd’s List Intelligence data shows that Dammam saw a 28.3% increase in the capacity of ships calling the port in the first half of 2024. Figures included a 43% jump in vessels of 10,000 teu-15,000 teu, up from 58 to 83 year on year.
In terms of volumes, this has translated into a 37.4% uptick in traffic for Dammam through the first half of the year from 1.1m teu to 1.5m teu.
At the entrance to the Bab el Mandeb strait in the Gulf of Aden, a number of carriers are also operating out of Djibouti to maintain Red Sea coverage. This includes CMA CGM and Saudi-based feeder and shortsea newcomer Folk Maritime, which started running a new service in April to cater for the northern Red Sea market.
Data from Lloyd’s List Intelligence shows that capacity calling Djibouti was down in the first half of the year by as much as about a third. However, much of this decrease was due to the absence of larger tonnage passing through the region.
For ships of 5,000 teu, or those classed as feeders, the numbers are telling.
Through the first six months of 2024, Lloyd’s List Intelligence noted an increase in callings of 59%, up from 156 to 248 ships.
Preliminary volume figures estimated by China Merchants Ports , which operates the Doraleh Container Terminal Djibouti’s primary containerised cargo facility — indicate a huge increase of about 77% over the past year to almost 650,000 teu in the first six months of 2024.
Mediterranean hubs
In the Mediterranean, with east-west trade effectively bypassing the Suez, there has been a major shift in how carriers are managing regional transhipment activity.
Before the crisis, it made sense to use all of the region’s transhipment hubs to ensure coverage of localised cargoes. With the route through the Suez effectively cut off, heading round the Cape of Good Hope and then to and from the Mediterranean requires significant diversion for onward journeys to the major ports in Europe’s northern range.
Where possible, carriers have therefore looked to ferry east Mediterranean cargoes from ports in the west to minimise such diversions and limit potential disruption to mainline Asia-Europe strings.
For ports in the west, this has led to a surge in throughput levels and similarly an increase in ultra-large tonnage, while the opposite trend has emerged for eastern Mediterranean ports.
Barcelona has been the biggest benefactor of this shift in transhipment activity since the turn of the year. Half-year volumes figures published by the Spanish port revealed an increase of 23.6%, upon handling nearly 2m teu against 1.6m teu in the corresponding 2023 period. Lloyd’s List Intelligence vessel tracking showed an extra 41% rise in 10,000 teu-15,000 teu classed boxships, and 22.5% upswing in 15,000+ teu units.
Valencia has also gained handsomely from the new dynamics in container line trade. The fellow Spanish port reported its own traffic increase in the first six months of more than 14% from 2.4m teu to 2.7m teu. While ships of 10,000 teu-15,000 teu increased by just one in number on the past year, larger units of 15,000+ teu were up 17%, according to Lloyd’s List Intelligence.
While not to the same degree as its compatriots, Algeciras has also welcomed an increased number of larger ships to its terminals in 2024.
The total capacity of ship calls may have only risen 3.8%, but those from 10,000+ teu vessels grew by as much as a third. In the second quarter alone, 15,000+ teu were up from 58 last year to 97, data shows. The Algeciras port authority, Autoridad Portuaria de la Bahía de Algeciras, noted 2.7% volume growth for the half-year.
Moroccan transhipment major Tanger Med, which has enjoyed a meteoric rise as a prominent regional hub, continued the trend of extra ultra-large tonnage calls at western Mediterranean ports.
At Tanger Med, total calling capacity through the first six months of 2024 was up 7.5%, but once more there were significant increases in larger units docking at the port. According to Lloyd’s List Intelligence, vessels of 10,000 teu-15,000 teu and 15,000+teu rose by 14.4% and 24%, respectively.
On the flipside, in the eastern Mediterranean, the overhaul of transhipment activity across the wider region has been to the detriment of the hub facilities.
Lloyd’s List Intelligence tracked a significant downturn in ultra-large tonnage callings, which many rely on as a fundamental part of their business model.
But calls at Piraeus, the largest transhipment hub in the eastern Mediterranean, fell 19% through the first half of 2024. The Greek port saw the number of 10,000 teu-15,000 teu vessels drop back by half from 122 to 59. In the case of 15,000 teu ships, only 23 called Piraeus, including only three in the second quarter, down nearly 60% on the 57 recorded in 2023.
Full half-year volumes for Piraeus are not available. However, Cosco Shipping Ports, which operates the lion’s share of volumes at Piers 1 & 2 (PCT), reported a 14.2% dip in its teu numbers to less than 2m teu from 2.2m teu.
Malta’s Marsaxlokk, which does not publish figures at the midpoint of the year, is expected to have seen volume declines of similar inclinations, with Lloyd’s List Intelligence data pointing to a 20% decline in the total capacity of callings. This was led by a drop of more than a third of 10,000+ teu capacity ships calling Marsaxlokk.
The pattern was repeated in the first half of 2024 at Egypt’s Port Said, where larger ship calls became an increasing rarity. Data showed that calling capacity was slashed by more than half, as transhipment opportunities through the nearby Suez diminished, while those in the 10,000+ teu class fell by more than 70% on the past year.
Port Said’s total throughput across its terminals is unavailable, but CPMH did reveal that the Red Sea Gateway Terminal, which handles about a third of volumes, fell by more than 13% in the first half of 2024 against the past year.
In the case of fellow Egyptian hub Damietta, the fall in capacity callings was not quite as drastic, down by 14.8%. Calls by 10,000+ teu ships were at about 75% of the level recorded in the first six months of 2024.
Alexandria proved one of the few exceptions. Here, the combined capacity of ships docking at the ancient deepwater harbour more than doubled, including a fourfold increase in ultra-large tonnage. However, this came about largely due to the opening of Hong Kong-headquartered Hutchison Port’s new Abu Qir Container Terminal, which drew in a number of new services upon its inception.
The other to buck the trend of ailing traffic numbers was Italian hub, Gioia Tauro, where the 1.4% increase in callings capacity can largely be explained by Mediterranean Shipping Company’s affiliation with the port. In juggling its own transhipment conundrum, the world’s largest carrier has ensured that Gioia Tauro has profited from its regional port rationalisation acting as the core hub for its Mediterranean feeder network.
Asian hubs
Colombo, as Lloyd’s List revealed in May, has swallowed up a large proportion of traffic destined for the Red Sea.
Sri Lanka’s hub-and-spoke specialist is predominately used as a wayport for Middle East and Indian subcontinental cargoes, making it an ideal option for carriers looking to maintain Red Sea coverage by moving boxes through the port. Colombo, too, requires only a day’s deviation for ships heading to and from the Far East’s via the Malacca Strait on the Asia-Europe circuit, while boasting the necessary infrastructure to handle ultra-large tonnage.
As a result, Colombo has cashed in from the disruption. In the first half of the year, capacity moving through the port increased 6.4%, according to Lloyd’s List Intelligence. Ships in the 10,000 teu-15,000 teu bracket increased in number by about 18% during this period, while 15,000+ teu units nearly doubled on-year from 41 to 80 calls.
This number would have been even higher if not for the fortunately timed opening of Hambantota International Port, located about 150 km southeast of Colombo, at the start of the year.
A joint venture between CMPH and the Sri Lanka Ports Authority, HIP has helped alleviate some of the pressure on its local rival, although volumes have been minimal thus far.
Data for Colombo for the half-year has not been published by the SLPA. However, it did reveal that through to the end of July, the port’s throughput was tracking nearly 10% on 2023’s figures.
Whereas Colombo has prospered off the back of Red Sea disruption, the Omani port of Salalah, which, like others, relies on the steady flow of east-west cargoes through the Red Sea, has seen trade decimated. A large share of the Salalah’s business proposition centres around being the relay leg for transhipment cargoes from the Red Sea to the Arabian Gulf and the Indian subcontinent.
This saw calling capacity drop by nearly 40% in the first half of 2024, which included an 80.1% fall in 10,000 teu-15,000 teu vessels. For larger ships of the 15,000+ teu variety, their representation dropped 85.2% from a total of 34 in the past year to just five. In the second quarter of 2024, only a sole ship with a capacity above 15,000 teu called Salalah.
At the halfway stage of the year, Salalah’s volumes had slipped back 16% on 2023’s count from just shy of 2m teu to below 1.7m teu.
Finally, there has been the effect of the crisis on the giant transhipment hubs in the Malacca Strait.
Ports such as Singapore, Port Klang and Tanjung Pelepas have been used for container re-handling purposes, where cargoes are loaded and reloaded onto different vessels to ensure regional cargo coverage is maintained ahead of journeys around the Cape of Good Hope. This has enabled carriers to sustain service levels amid the disruption.
The result led to localised congestion, particularly in Singapore, in the early months of Red Sea diversions, leading to long queues of ultra large containerships awaiting port entry.
In the first half of the year, Lloyd’s List Intelligence noted that capacity through Singapore was largely unchanged. However, calls from larger ships grew notably. This included an 8.5% rise in 15,000+ teu ships. Meanwhile, extra traffic through the port was up 6.4% in teu terms to more than 20m teu, according to the Singapore’s principal operator PSA International.
The trend of increased calls from larger ships was repeated at the Malaysian hubs of Port Klang and Tanjung Pelepas.
Additional reporting by Bridget Diakun
