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A battle over contracts: Companies chartering dry bulk carriers are pressuring shipowners to remove a “wartime” clause from contractsas they threaten legal action and push for Suez Canal transits in order to curb delays, The Financial Times reports. Daily arrivals by bulk carriers at the entrance to the Red Sea were down 45% in the week ending 28 January when compared to early December, the FT reports, citing Clarksons data. Some charterers have asked shipowners to eliminate a standard “wartime” clause from contracts, which allows shipowners to reroute if direct shipping lines are too risky. Removing such a clause would allow charterers to force shipowners to continue using the Suez Canal.
Taking to the skies: Global air freight rates have spiked for the first time in seven weeks in the countdown to Chinese New Year, as companies continue work around Red Sea disruptions, Reuters reports. The Baltic Air Freight Index rose some 6.4% in the week ending Monday, the newswire writes, citing price reporting agency TAC Index. “The increase is in line with expectations that rates may spike following disruption to ocean shipping in the Red Sea, though sources also point out that rates often rise in the run-up to Chinese New Year,” TAC Index explained.
MARKET REAX- Hapag Lloyd has reported a 4Q 2023 loss on the back of lower transport volumes, Reuters reports, citing the carrier’s preliminary earnings figures for 2023. The company saw an EUR 200 mn loss before interest and tax for 2023’s last quarter, compared to an EUR 3.3 bn gain for the same period last year. The dent in the carrier’s earnings was larger than expected compared to previous forecasts by the London Stock Exchange Group predicting a EUR 134 mn loss, the newswire said.
Hapag Lloyd’s shares took a tumble: The carrier’s shares were 8.5% down at 10.52 GMT yesterday, nearly wiping out all gains in share price that had been chalked up to higher freight rates due to Red Sea disruptions, the newswire said.
Refined fuels are taking the brunt of the disruptions, not crude oil prices, Reuters reports. Friday’s attack on a Trafigura-operated tanker, which was hauling a cargo of Russian naphtha, saw margins on fuel products such as diesel and gasoline surge in European and Asian markets, the newswire said. The margin on a barrel of gasoil at Singapore’s refineries rose 18% on Monday to USD 25.58, placing it at its highest since 3 November and marking the largest one day leap in three months, the newswire said. Diesel markets in Europe also rose in response to the incident. Despite the recent hike, a prolonged increase in fuel oil price is not anticipated as disruptions will likely see Europe import more US products while Middle East output gets redirected to Asia, in a manner that is similar to the reshuffles seen in the energy market following Russia’s invasion of Ukraine in early 2022, the newswire explained.
ON A RELATED NOTE- Indian navy vessel INS Sumitra rescued two Iranian fishing vessels that were hijacked on Monday by Somali pirates,Reuters reported yesterday citing an Indian Defence Ministry statement. The INS Sumitra rescued 17 Iranian nationals from the first boat, before rescuing another 19 Pakistani nationals aboard a second vessel that had sent a distress call, the newswire said citing the ministry statement. The day also saw forces from the Seychelles rescue six crewmen aboard a Sri Lankan fishing trawler from an attack that was also attributed to Somali pirates, the newswire added.
REMEMBER- Somali pirates are making a comeback: Earlier this month saw Somali pirates board Liberian-flagged bulk carrier Lila Norfolk off the Somali coast. The gunmen abandoned their attempt when the Indian navy responded with a warship. Pirate activity in the area has resumed after a 6-year hiatus, with attackers emboldened after a US-led anti-piracy mission began diverting its attention to countering the Houthi threat.
OTHER DISRUPTION NEWS WORTH KNOWING-
- Bahri Logistics is providing alternative routes to its customers:Saudi’s Bahri Logistics will offer a sea-land multimodal corridor linking Jeddah to Dammam and Jebel Ali. The new corridor will allow cargoes from the US and Europe to Asia, and vice-versa, to sidestep Red Sea disruptions, and leverages the company’s maritime and road fleets and customs clearance team. (Statement)
- Red Sea disruptions saw container schedule reliability to dip: While container line schedules saw a general improvement in reliability in 2023, there was a 5% drop in reliability in December 2023 to 56.8%, according to analysts Sea-Intelligence’s Global Liner Report, which cites diversions due to Houthi-led attacks as a disruptor for container line schedules.(Seatrade Maritime)
- Cameron to visit Oman and call for de-escalation: British Foreign Secretary David Cameron arrived in Oman yesterday to meet his Omani counterpart Badr Albusaidi and discuss how to reduce tensions in the region. (Reuters)
