As the world absorbed the reality that the Suez Canal will almost certainly remain blocked for at least several more days, hundreds of ships stuck at both ends of the channel on Friday began contemplating a far more expensive alternative: forsaking the channel and heading the long way around Africa.
A journey from the Suez Canal in Egypt to Rotterdam, in the Netherlands — Europe’s largest port — typically takes about 11 days. Venturing south around Africa’s Cape of Good Hope adds at least 26 more days, according to Refinitiv, the financial data company.
The additional fuel charges for the journey generally run more than $30,000 per day, depending on the vessel, or more than $800,000 total for the longer trip. But the other option is sitting at the entrance of the canal and waiting for the mother of all floating traffic jams to dissipate, while incurring so-called demurrage charges — late fees for cargo — that range from $15,000 to $30,000 per day.
“You are either stuck with the commodity and waiting for things to evolve, or you take the cost and you move your commodity, and you free up your ship,” said Amrit Singh, lead shipping analyst at Refinitiv in London. “People have started making decisions.”
surge of orders spurred by the pandemic.
A world whose initial experience with the coronavirus featured the hoarding of toilet paper now braces for fresh shortages of that vital commodity. Like many consumer goods, paper products are transported through the Suez Canal in giant shipping containers.
More than 200 ships are now stuck at either end of the Suez Canal, with no clarity on when they will be able to continue their journeys. Some 80 additional ships are scheduled to arrive over the next three days, Mr. Singh said.
For ships that had been on their way to Europe from Asia and are stuck at the southern end of the canal, the route around Africa involves crossing through an area off Somalia that is rife with piracy. Some ships are carrying security teams that enable them to pass through the piracy zone. Those that lack guards must detour around it, adding three more days to their journeys.
Crews may be unfamiliar with the waters around Africa’s southern tip, where the convergence of warm and cool currents produces turbulent and unpredictable conditions. Early Portuguese navigators called this region “the cape of storms.”
These are the sorts of factors that shipping companies are now considering.
“It is like choosing the queue at the post office,” said Alex Booth, head of research at Kpler. “It is never the right decision.”
Already, seven giant carriers of liquefied natural gas appear to have decided to change course away from the canal, according to Kpler.