Schedules "all over the shop", extended journeys to lucrative markets and higher freight costs are the "new normal" for cargo ships carrying Australian agriculture commodities navigating the Red Sea crisis.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
Iranian-backed Houthis rebels have attacked at least 57 commercial ships in the Suez Canal and Gulf of Aden since striking a vessel called the Galaxy Leader on November 19.
However, the pace of assaults have increased through the latter half of February as more shipping lines redirect vessels along the more expensive route below South Africa - which typically adds 10 to 14 days sailing time.
In fact, new data reveals that container tonnage crossing the Suez Canal dropped by 82 per cent from mid-November to mid-February, while there was an increase during the same period of 60 per cent, or 621 container ships, through the Cape of Good Hope.
Freight and Trade Alliance head of international freight and logistics Tom Jensen said the disruptions had triggered a dramatic fall in global schedule reliability.
He said that only two of the world's top 13 carriers were currently averaging over 60 per cent reliability, with six falling between 50 and 60 per cent and five were under 50 per cent, or half its voyages, not berthing or leaving on time.
"It is essentially the new normal until things settle down and with daily attacks we cannot really see any light at the end of tunnel," he said.
"The extra lead times are the main concern. Extra fuel costs and delays are obviously impacting pricing, which are up significantly year-on-year.
"Schedules are also all over the shop at the moment, they are trying to fine tune them to suit but it hasn't settled down as yet."
Mr Jensen said the uncertainty was compounded by frequent new vessel sharing arrangements and scheduling changes, the latest being ANL announcing a shake-up of its calendar out of Western Australia earlier this week.
The latest Drewry composite World Container Index data shows a slight two per cent decrease in the past month to $3659 to ship a 40ft container as at 22 February 2024 after reaching highs of $3964.00 on January 25.
However, that dip is attributable to a drop off in demand following the end of the Chinese New Year and rate levels still remain up 164pc since the seizure of the Galaxy Leader three months ago and up 93pc when compared to the same time last year.
While some exporters have turned to air freight to avoid the delays, that is not a luxury when needing to transport high volume, low value commodities to market as cheaply as possible.
Australian Oilseeds Federation chief executive Nick Goddard said, while the Houthis had caused havoc on the most direct route to European markets, Australian canola consignments - which are overwhelmingly sent as bulk and not containerised freight - were continuing to flow to Europe after exporters had taken "the prudent option" to detour via the Cape of Good Hope.
"This route is longer and that makes it more expensive than the Suez but I haven't heard of any issues with cargo going this way barring a little bit more time at sea," he said.
"It is something the industry is comfortable doing in light of the risks of going via the Red Sea in the current environment."
However, other industries, such as the rich live export trade whose markets are located in the Red Sea are in a different position to those agricultural products using the Suez Canal as the quickest route to ship into Europe.
Australian Live Export Council chief executive Mark Harvey-Sutton said Australian exports should be protected under the right of freedom of navigation
Currently the government is considering approvals on a case by case basis.
"This situation is obviously concerning. Operationally, exporters consider the situation as part of their risk management plans and work with the Australian Government to determine the best course of action," he said.
"Australian exports are still in demand from the Middle East region and we want to ensure safe voyages for both crew and livestock on board.
"Exporters are ensuring all possible security measures are in place as they have no intention of sending their consignments into harm's way."
A coalition force, led by the US and UK, have been attacking Houthi targets in Yemen.
An environmental disaster unfolded as the result of a Houthi attack on bulk carrier Rubymar on February 18 which caused a 29 kilometre oil slick and the danger of 41,000 tons of fertiliser spilling in the water.
.
