Houthi attacks on commercial shipping have resulted in the first day for 30 years without a single car carrier in the Red Sea, Gram Car Carriers board chief Ivar Myklebust told the Marine Money conference in London.
The heightened tensions have seen numbers plummet from about nearly 90 transits a month to zero on 23 January with all the main players diverting voyages around the Cape of Good Hope, he said.
The export of Chinese electric cars to Northern Europe has driven the market that has surged since the Covid pandemic. In 2021, there were about 60 pure car, truck carrier transits a month, about 75 in 2022 and up to 90 in 2023 before the attacks in the Red Sea hugely affected the trade.
He said Tuesday was “the first day single day where there were no PCTCs in the Red Sea, which hasn’t been seen for the last 30 years. So that has a significant impact on the trade balance.”
Myklebust said re-routing via the Cape of Good Hope added 10 to 12 days to a single journey in a tight market that is already using alternative methods, including containers, to move a tenth of vehicles. It said it added 5% to 7% to demand.
It means that “you have the recipe for a very tight and strange market in a sense,” he said.
“The Suez Canal disruptions mean higher freight costs, delayed deliveries and a real increase in overall uncertainty.”
The short-term impact is that “every responsible operator” will reroute.
All three large Norwegian owners — Wallenius Wilhelmsen, Hoegh Autoliners and Gram Car Carriers — have decided to avoid the Red Sea.
But NYK and Grimaldi Group continue to sail into the security hotspot, according to AIS data analysed by TradeWinds.
NYK was the operator of the 5,100-ceu Galaxy Leader (built 2002) that was hijacked by Houthi militants on 19 November, the first in a string of attacks that stretched through December and into the new year.
Gram Car Carriers said that the situation may change at short notice but “at the moment we do not see any change in the situation that warrants that we will let our vessels go through the Red Sea”.
VesselsValue analyst Daniel Nash told TradeWinds this week that its one-year time charter index for car carriers sits around $123,500 per day for a standard vessel.
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