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Shipping Costs Rise with Red Sea Shift, Drewry

[ February 28, 2025   //   ]

The re-routing of merchant ships around Cape of Good Hope instead of crossing the Bab-al-Mandab has not only led to significant changes in trade patterns and tonne-mile demand, but has also resulted in certain operational challenges, especially regarding the procurement of certain stores and spares items, according to a report by Drewry.
The Port of Suez had been used as a main procurement hub by many vessel operators crossing the Suez Canal with their ships before re-routing. For these operators, the No. 1 alternative is South Africa, where prices can be significantly higher, albeit – as usual – depending on fleet size and existing relationships with sellers among else.
Yet, the level of stores and spares cost increases seen in 2024 across the global vessel fleet (estimated at 5.4 percent and 5.5 percent, respectively) cannot be justified exclusively by the above.
Based on Drewry’s annual survey of ship operating costs, cost increases did not only occur to those with vessels re-routing around Africa. After a few years with low growth in costs due to operators delaying repairs and procurement, a pick-up was expected following the strong price increases in the 2021-22 period. Since then, prices have decreased only slightly and even increased in some instances amidst the current shipbuilding boom.
On top of the current trend described above, further geopolitical issues and regulations, and the resulting supply chain bottlenecks would facilitate the potential for a significant upside risk for most ship operating costs.
Drewry’s Ship Operating Costs Annual Review and Forecast 2024/25, One of Drewry’s flagship reports, provides an annual assessments of ship operating costs available in a single source. Operating cost assessments are provided for 47 representative ship types and sizes, spanning the container, dry bulk, oil (crude and products), chemical, LNG, LPG, general cargo, reefer, ro-ro and car carrier sectors.
Drewry’s Ship Operating Costs Annual Review and Forecast 2024/25 is available at https://tinyurl.com/5apvu384.

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