Summary:
- Kenyan logistics and shipping companies are grappling with doubled freight costs, higher premiums, and delays as a result of attacks in the Red Sea channel, forcing vessels to reroute around the Cape of Good Hope, increasing transit times from 14 to 48 days and covering over 8,600 nautical miles, with concerns rising about escalating risks and insurance premiums in the maritime industry.
Kenyan logistics and shipping companies are facing up to double freight costs, higher premiums and delays following the attacks at the Red Sea channel.
Shippers and importers say the disruptions have resulted in expensive changes to them and clients.
Freight charges have gone up by between 70 percent to 100 percent depending on the company.
Transit time has also stretched from around 14 days to 48 days.
“The Red Sea attacks have greatly affected the shipping routes since shipping lines are now using a longer route to get goods into the country,” said Superb Cargo Shipping Agency Limited.
“Usual transit time if direct can be anything between 10 to 14 days. Now it’s close to 48 days and change [freight costs] percentage wise usually depends on the shipping line, some by 100 percent others by 70 per cent.”
Shipping companies have been forced to reroute their containers following the recent attacks at the Red Sea by Houthi, Yemen-based militants.
Maersk, a Danish shipping giant announced on Tuesday that following an attack on its vessel on December 30, the company has paused all transits through the Red Sea or the Gulf of Aden until further notice.
The global logistics firms operating in Kenya and East Africa said vessels will be rerouted and continue their journey around the Cape of Good Hope.
The distance between the Port of Mombasa from the Suez Canal is about 3,141 nautical miles. A ship going round to avoid potential Houthi attacks – through West Africa and South Africa— will cover a distance of more than 8,600 nautical miles to get to the Kenyan port.
The attacks are part of the global fallout from the Israel-Gaza war that threatens to spread further in the Middle East region.
There have been multiple attacks against container ships going to Israel via the Red Sea, using the Gulf of Aden, and other countries bordering the Red Sea.
Maersk, CMA-CGM, Hapag Lloyd, and MSC ships are some of the shipping companies to have suffered attacks at the Red Sea.
“Most shipping lines are using the southern route [Cape of Good Hope] meaning goods take longer to arrive at the Port of Mombasa inconveniencing the clients, especially business owners,” Superb Cargo Shipping Agency Limited said.
Shipping through the Cape of Good Hope in the southern part of Africa is increasing both costs for shippers as well as transit times for cargo.
The managing director of Siginon Group Meshack Kipturgo said the impact will lead to higher shipping costs and delays in getting goods.
Kenya imports oil, fruits, spices, and animal hides and exports coffee, cement, lime and other food products through the Red Sea.
Fears are growing over worsening perils for commercial shipping, maritime as insurance premiums edge upwards on increased risks after vessels were attacked on the Red Sea.
“When a risk increases, there’s a tendency to increase premiums where risk is reasonably manageable and if unmanageable, or when there’s a projected loss then we have no option but to opt out,” said Mr Tom Gichuhi, the Chief executive officer at Association of Kenya Insurers (AKI).
