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Red Sea recalibration creates winners and losers for container ports

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Shipping’s recent extended rerouting of east-west trades around the Cape of Good Hope, to avoid potential Houthi attacks in the Red Sea, has led to huge increases in throughput at some ports, while others have seen dramatic declines.

The impromptu shift in container line trades has led to a complete recalibration and relocation of discretionary Red Sea transhipment volumes serving the Middle Eastern market. Under normal trading conditions, the lion’s share of these cargoes would be handled by the Saudi majors, namely Jeddah and King Abdullah.

With the security risk so high, carriers have been left with no option but to explore alternatives to ensure Middle East coverage is maintained. As a wayport option, Sri Lanka’s Colombo ticks all the boxes.

Already a major transhipment hub serving not just the Middle East but the wider Indian subcontinent, Colombo is well equipped to handle the ultra large box ships plying the east-west trunk trades. 

More significantly, Colombo’s location in the Indian Ocean requires only a day’s deviation for ships heading to and from the mega ports in the Far East via the Malacca Strait on their respective head haul and backhaul journeys around the Cape of Good Hope.

Colombo, which handles around 7m teu annually, is one of the top 30 global container ports as ranked by Lloyd’s List and the extra services and callings have led to significant volume gains.

Official figures show that port throughput in Colombo jumped nearly 25% in the first quarter of 2024 to 2m teu from 1.6m teu in Q1 of 2023.

Data from Lloyd’s List Intelligence showed that the increase was predominantly led by an influx of calls from ultra-large containerships.

The number of vessels with a carrying capacity of more than 15,000 teu calling at Colombo more than doubled in the first three months of 2024 on the past year’s levels from 23 to 54 ships, according to Lloyd’s List Intelligence. Total capacity docking in Colombo increased to 5.3m teu in the first quarter of 2024 against 4.2m teu on the corresponding period in the past year.



Red Sea exodus

While Colombo has benefited significantly from disruption in the Red Sea, the Saudi ports in the region have borne the brunt of carrier reroutings.

In March, Lloyd’s List reported how volumes in both Jeddah and King Abdullah had been decimated by the initial impact of the southern migration of carriers around Africa. The Red Sea exodus of ultra-large tonnage serving the east-west trade lanes via the Suez Canal, had put a glaring hole in the ports business.

While gateway cargoes continue to flow through the ports to and from the Suez in the north via a series of regular feeder services, transhipment traffic has almost ground to a halt.

For King Abdullah, which was established for the sole purpose of taking advantage of its strategic Red Sea location for transhipment, the effect has been considerable.

Traffic through King Abdullah in the first three months of 2024 was down more than a quarter on the past year during normal trading conditions.

Figures from Lloyd’s List Intelligence show that only 48 ships called the port in Q1 of 2024, down 76.7% on the 206 vessels in the corresponding period of 2023.



Total containership capacity calling the Saudi Red Sea port was recorded at just below 250,000 teu in the first quarter of this year, down nearly 90% on the first quarter of 2023 when King Abdullah arrivals topped more than 2.1m teu, according to Lloyd’s List Intelligence. King Abdullah’s transhipment quota of total volumes was estimated at about 90% pre crisis, which tallies with the traffic deficit.

Saudi compatriot Jeddah caters for a much larger share of gateway traffic.

Although vessel calls both in terms of number and capacity did not fall quite as drastically as King Abdullah during the first quarter of 2024 on last year, the decrease was still marked.

Jeddah’s vessel arrival count stood at 359 in the first three months of 2024, representing a 45% drop on the 648 recorded in Q1 of 2023, according to Lloyd’s List Intelligence.

Yet more striking is the fall in frequency of larger ships calling Jeddah once more in the absence of mainline loops through the region.

Lloyd’s List Intelligence data shows that only 21 boxships with a teu capacity above 10,000 teu was handled in Jeddah in the January through March period this year. In Q1 of 2023, this figure was as high as 137. In March alone this year, just three ships with a capacity of more than 10,000 teu called at Jeddah.

With transhipment cargoes effectively wiped out in both Jeddah and King Abudullah, the impact on their respective teu count of boxes moved from ship to shore will undoubtedly be significant, particularly for the latter where effectively 90% of its trade has been eradicated.

This article is based on data available from Lloyd’s List Intelligence’s Seasearcher platform. To find out more and to request a demonstration, follow this link.

Lloyd’s List subscribers can read the full analysis article here.