CMA CGM TO MAINTAIN CAPE DIVERSIONS ON MAJORITY OF NETWORK
Of the top tier container lines serving the Asia – Europe trade CMA CGM is the only carrier to have maintained some presence through the Red Sea and the Suez Canal over much of the last 14 months operating services on a case-by-case basis. Following the ceasefire between Hamas and Israel in Gaza the Houthi lifted its threat to most international shipping transiting the Southern Red Sea and the Gulf of Aden apart from Israeli owned or flagged vessels. At the weekend CMA CGM provided an update regarding possible future changes to its network given the improved security situation. The company added that adjustments could be made on a case-by-case basis dependent on security and operating conditions. “The ceasefire allows humanitarian relief and hope for peace. Recent developments in the region suggest progress towards greater stability, which is a positive but fragile sign for the global shipping and logistics industry,” CMA CGM said. Maersk, MSC, and Hapag-Lloyd have all indicated that they will maintain Cape of Good Hope transits for the time being.
THREAT ‘REMAINS HIGH’ TO ISRAELI, UK AND US SHIPPING IN RED SEA
The Houthi have lifted a ‘ban’ on vessels transiting the southern Red Sea, Bab-el-Mandeb, and Gulf of Aden, but the situation remains fraught with risks for international shipping, according to security experts. Houthi attacks on merchant ships were justified by the group as an action in support of Hamas, punishing Israel for attacks on Gaza. The Houthi commitment to end attacks on shipping is dependent on the Israel-Hamas ceasefire, introducing risks to ships in the event of an actual or perceived contravention of the ceasefire from any side. A ban on transiting the Bab-el-Mandeb Strait and surrounding area remains in place for Israel-owned and -flagged vessels but has been lifted for ships affiliated with Israel’s allies and ships calling at Israel’s ports. The Houthi said Israeli ships will be allowed passage once all phases of the peace agreement have been concluded. “Houthi military action in response to a perceived breach of the ceasefire agreement by Israel remains possible and would highly likely impact Israel-affiliated shipping first,” Ambrey noted in a Threat Circular. “The Houthi did not specify how they intend to prevent an Israel-owned or -flagged vessel from transiting the Bab el-Mandeb. The attack of such a vessel, or a flashpoint escalation, is assessed as possible to result in an Israeli airstrike against the Houthi,” said Ambrey.
CONTAINER RATES DROP SHARPLY AS HOUTHI RED SEA THREAT LIFTS
Container freight rates over the last year have been considerably higher than expected due to the attacks on commercial shipping by the Houthi in Yemen resulting in all the major lines of the Asia – Europe and Asia – US East Coast trades diverting vessels from the Red Sea and Suez Canal to go via the Cape of Good Hope. Adding an extra 10 – 14 days to a voyage in each direction the diversions acted to soak up excess capacity coming into the market that had been expected to put freight rates under pressure. With the ceasefire in Gaza the Houthis have largely lifted their threat to shipping transiting the region and a gradual return to Red Sea and Suez Canal transits is expected which will in turn increase excess capacity. At present though lines are adopting a cautious approach with Maersk, Hapag-Lloyd, and MSC, all saying they will continue with Cape of Good Hope transits for the time being.
LOS ANGELES, THE BUSIEST US CONTAINER PORT, PLANS AN EVEN BIGGER FUTURE
While the global supply chain seemed whipsawed on a daily basis in 2024, one thing remained constant: a veritable tsunami of ocean containers moving through the Port of Los Angeles. The busiest U.S. maritime trade hub moved 10.3 million container units in 2024, a record 1.7 million TEUs or nearly 20% higher than a year ago. “That is our second-best year in the 117-year history of the Port of Los Angeles,” said Executive Director Gene Seroka, who spoke at the annual State of the Port event Thursday, “and nearly a 20% increase in volume over 2023. In fact, we moved 1.7 million more TEUs than last year, which is the largest incremental gain we’ve ever seen.” Total volume finished short of the record 10,677,610 TEUs handled in 2021. Coming off a near-record year, LA still has room to grow: Seroka in a media briefing this past fall said the port was operating at 80% capacity.