Cape of Good Hope detour dropped as fuel prices rise

SUDDENLY rising fuel costs are prompting carriers to abandon their much vaunted cost-saving scheme to re-route largely empty eastbound ships from Europe to Asia via the Cape of Good Hope to escape Suez Canal fees because it no longer appears to save money.

According to AXS-Alphaliner's bunker price movement calculations, based on September 2008 to June 2009 figures, mean that cost-cutting this way is only feasible when fuel prices are below US$350 a ton and surplus tonnage is available. Despite an abundant surplus of ships fuel prices have risen since May and now top $390-$410 per tonne based on a 9,500-TEU vessel.

The reversal of Maersk's AE-6 service through the Suez route using 9,500 to 10,000-TEU ships began in late May when the eastbound call at Salalah was reinstated, while its AE-7 using 14,000 TEU returns in June retaining its Tangier to Shenzhen (Yantian) via Suez without intermediate calls currently, although some with ad-hoc calls at Dubai Jebel Ali.

CMA CGM/CSCL is to return to the Suez and bring its sailing rotation back to eight weeks from nine on its FAL-2 service deploying nine 9,500-TEU ships.

The reversal for all of the Swiss liner's MSC follows the April changeover on its Lion service and its loop returning to the Suez Canal since May.

Evergreen's merger with CSCL on its CEM service will now create a new routing, which will not include the deviation around the Cape.

Grand Alliance is the only carrier to retain its EU-3 service deployed by 9,000-TEU ships around the Cape, but it is likely to alter this should the fuel prices remain high, said Alphaliner.

(Source: Shipping Online)