Kenya and other East African countries are now staring at higher freight costs and longer cargo delivery time, as global shipping lines shun the Red Sea route over attacks.
Already, two of the world’s largest shipping groups– Mediterranean Shipping Company (MSC) and Maersk have diverted their vessels away from the Red Sea, avoiding the Suez Canal which is a key route for voyages to Mombasa and the East African coastline.
The decision comes after attacks by Iran-backed Houthi rebels in Yemen, who are targeting ships travelling to Israel.
The Houthis have declared their support for Hamas in the ongoing war where Israel launched a military campaign in Gaza, following the October 7 Hamas attacks that killed 1,200 people and saw about 240 taken hostage.
On December 15, 2023 container ship MSC PALATIUM III was attacked at approximately 09.37 UTC while transiting the Red Sea under sub charter to Messina Line, the shipping line said.
“ All crew are safe with no reported injuries, meanwhile the vessel suffered limited fire damage and has been taken out of service,” a statement by the shipping line read in part.
“Due to this incident and to protect the lives and safety of our seafarers, until the Red Sea passage is safe, MSC ships will not transit the Suez Canal Eastbound and Westbound. Already now, some services will be rerouted to go via the Cape of Good Hope instead,” MSC added.
This disruption will impact the sailing schedules by several days of vessels booked for Suez transit, management noted.
“We ask for your understanding under these serious circumstances,” it said.
Maersk has also paused all voyages through the Red Sea after repeated Houthis attacks and warnings.
Its vessel Maersk Gibraltar was targeted by a missile while travelling from Salalah, Oman to Jeddah, Saudi Arabia.
Salalah is a key transshipment hub serving Kenya, Dar es Salaam and other small ports on the Indian Ocean coast of the region.
Other firms that have taken similar steps include French company CMA CGM, a key shipping line that calls at the Port of Mombasa, and German transport company Hapag-Lloyd, with more expected to follow suit.
The Red Sea is one the world's most important routes for oil and fuel shipments.
Kenya Ports Authority was expecting at least 26 container vessels, 23 conventional ships and six tankers, between yesterday and December 28.
Of these, eight container vessels belong to MSC.
The conventional vessels are mainly bringing in steel products, motor vehicles, fertiliser and wheat.
The tankers are carrying petroleum products, butane, base oil and palm oil.
The 193km-long canal connecting the Mediterranean to the Red Sea, provides the shortest sea link between Asia and Europe, and a shorter route to East Africa compared to going round West Africa (Atlantic), to South Africa, before coming to the East.
The Houthis have been stepping up their attacks using drones and rockets against foreign-owned vessels.
About 30 per cent of vessels that sail in the international waters use the canal.
The Shippers Council of Eastern Africa (SCEA) has since warned that the disruption could have a major impact.
“It would pose a major challenge as the vessels will be forced to re-route through West African maritime route while others will call at Djibouti to avoid going through Suez,” SCEA chief executive Gilbert Lang’at told the Star.
According to Lang’at, major impact will be longer vessel times and effect for transshipment ports in Asia and Middle East, that service majorly Eastern Africa ports.
“Freight and time increase may occur,” he noted.
The US on Saturday said its guided-missile destroyers had shot down 14 drones in the Red Sea, even as it announced the formation of “Operation Prosperity Guardian”, to deal with Houthi threats.
Maersk and MSC’s vessels are among the largest that call at the Port of Mombasa with container services both for imports, exports and transshipment.
With the re-routing, importers and exporters in Kenya and landlocked countries using the Port of Mombasa are staring at a sharp increase in freight costs, which will ultimately push up the cost of goods.
This, as Kenya remains a net imports for both finished goods and key raw materials for manufacturing.
It could be a repeat of 2021 when international freight charges went up by between 20–25 per cent, after a week-long blockage of the Suez Canal.
The Suez canal was rendered impassable between March 23–29 after giant cargo vessel– Ever Given, operated by global shipping firm Evergreen, wedged across the canal after being blown off course by high winds.
It kept more than 450 ships in waiting at the vital waterway which provides passage for about 12 per cent of global trade.
The incident, combined with a vessel shortage during the Covid-19 pandemic period, saw the cost of shipping a 40ft container for example, from most ports to Mombasa, increase from an average $1,400 to between$3,600 t0 $3,700, with consumers paying the price.
Local manufacturers were hard hit with delays in shipment of raw materials and finished goods, affecting production.
According to the Kenya Association of Manufacturers (KAM), there was an average of one to two weeks delay in terms of overall time, especially for shipping lines using the Canal.
“The delays had an impact on shipping lines from Europe and Asia hence, affecting Kenyan imports in terms of vessel availability, transhipments and general cost adjustment,” KAM said.