Trickle turns into a flood as containerships opt for Cape Route
The number of containerships that have opted to use the Cape Route and bypass the Suez Canal has risen to a historic peace-time high. Since the of March, Alphaliner has tracked at least 20 sailings that used the longer route via the Cape of Good Hope.
Rather unusually, even three westbound Asia - Europe headhaul sailings have opted for the Cape Route, all of them operated by CMA CGM. Carriers very rarely choose this longer route for the transit-time sensitive headhaul, but the current low bunker price and lack of demand in European markets, hit by the COVID-19 lockdowns, have suddenly made such moves viable.
In addition, nine eastbound Europe - Asia sailings and eight eastbound US East Coast - Asia sailings have also chosen to take the longer route to avoid paying the usual Suez Canal tolls. These diversion will cost the Suez Canal Authority (SCA) over $10M in lost ges. This comes on top of revenue losses from a record number of cancelled sailings on both the Asia - Europe and Asia - US East Coast routes since February.
These losses forced the SCA to grant further discounts to discourage ship diversions. After a first round of rebates for ships that return from Europe, announced on 30 March, proved insufficient, a new rebate scheme for containerships returning to Asia from Europe and North America was announced on 30 April (see page 2 for details). Several sailings nevertheless opted for the Cape Route in May - even after the higher discounts were made available.