ISRAEL BOUND SHIPS ATTACKED BECAUSE OF GAZA : RED SEA CRISIS

The insurance cost of shipping goods through the Red Sea has more than doubled in recent days after Yemen's Houthis attacked and sank two ships, killing at least four seafarers after months of calm, industry sources said on Thursday.

The Red Sea is a critical waterway for oil and commodities but traffic has dropped sharply since Houthi attacks off Yemen's coast began in November 2023 in what the Iran-aligned group said was in solidarity with Palestinians in the Gaza war.

War risk premiums have risen to around 0.7% of the value of a ship, from around 0.3% last week before the latest attacks took place, sources familiar with the matter said, with some underwriters pausing cover for some voyages.

Rates for a typical seven-day voyage period, which are set by individual underwriters, have been quoted this week at up to 1%, matching the peak level in 2024 when there were daily attacks. This adds hundreds of thousands of dollars in further costs for every shipment.

Insurance industry sources said underwriters would try to avoid covering any vessel with links with Israel, even if it was indirect.

"What we have seen in the last week appears to be ... a return to mid-2024 targeting criteria, which essentially involves any vessel with even a remote Israeli connection," said Munro Anderson, head of operations at marine war risk insurance specialist Vessel Protect. "With ambiguity comes risk."

SOUTHERN AFRICA TRANSIT PILES UP COSTS

The transport route around the southern tip of Africa was once little used — but freighters are now forced to take it and are charging higher rates.

To get from Asia to Europe and back, global shipping companies have for decades sailed through the Red Sea and the Suez Canal. But a year ago, the Houthi insurgents in Yemen began targeting vessels in the Red Sea with drones and missiles, forcing shipping companies to divert their cargo around the Cape of Good Hope at Africa’s southern tip, a route that is some 3,500 nautical miles and 10 days longer.

Now, as this great diversion enters its second year, the costs are piling up for importers, the environment and countries like Egypt that rely heavily on maritime revenue. And the stress on shipping is likely to increase if companies rush to bring in imports 

But the diversion around Africa has increased the need for vessels — more were deployed to maintain regular service over the longer route — and rates have surged. The cost of shipping a container from Asia to Northern Europe is up 270 percent in 12 months, according to Freightos, a digital marketplace for shipping.

The demand for ships has pushed up rates everywhere. The cost of shipping a container from China to a West Coast port in the United States is up 217 percent over 12 months.

Some importers have been hit with much larger increases.

FESCO STARTS CONNECTING MOMBASA, KENYA

• A Russian transport company launches sea route to Kenya. 
• FESCO has started shipping cargo between Novorossiysk on the Black Sea and Mombasa

A Russian shipping company has launched a container route between Novorossiysk on the Black Sea and Kenya’s largest port, Mombasa. 

On Wednesday, FESCO – owned by Russian state nuclear power firm Rosatom – announced that the first consignment of Kenyan tea bound for Russia was being loaded in Mombasa. The projected transit time is 43 days.

The FESCO statement indicated that Russia will export construction materials, fertilizers, metals, polymers, wood products, as well as paper and pulp to Kenya using the new route. Imports from the East African nation will be dominated by tea, coffee, nuts, and other agricultural commodities.

Russia’s export shipments will go from Novorossiysk to India’s Mundra port, a regular stop for vessels operating on the FESCO Indian Line West route between India and Novorossiysk, before onward transportation by feeder vessels to Mombasa. Imports will make their way through the port of Jebel Ali in the United Arab Emirates, ensuring a steady flow of diversified goods between the two countries.