Since October, all vessels calling Israeli ports have been subject to an increased insurance premium due to the ongoing risk in and around the area.
Covering the additional insurance has enabled companies to keep operations moving as steadily as possible and secure capacity in the market for the customers over the final three months of the year.
Moving into 2024, insurance premiums continue to be raised for vessels bound for Israel.
The attacks, targeting a route that allows trade, especially of oil, to use the Suez Canal to save the time and expense of circumnavigating Africa, have pushed some shipping companies to re-route vessels to avoid the area.
The Red Sea area is something of a chokepoint for global oil trade. That makes it a significant area for the global insurance sector, especially concerning maritime security risks.
The insurance industry faces now new challenges as the shipping sector grapples with heightened security threats. In making this dramatic move, Maersk is acknowledging the significant threat these attacks pose to the safety of seafarers.
As per experts, some ships have started taking the South African route to avoid the Houthi menace.
The only real alternative to the Suez Canal is going around the Cape of Good Hope, which adds up to 10 days sailing time on an Asia to North Europe or East Mediterranean service.
This delays the duration of the trip adding to the costs and logistical woes.
It is expected insurance costs to keep rising but as it is said the situation would have to get a lot worse — such as the loss of several ships — to raise prices considerably and make some ship owners rethink moving through the region.
The Marseille-based shipping liner CMA CGM Group, a global player in shipping and logistics, has decided, in accordance with the clause 10 of its bill of lading, to reroute some of its vessels currently sailing to and from U.S., to and from North Europe and to and from Asia or Indian Subcontinent via the Cape of Good Hope at the southern tip of Africa.
All others CMA CGM containerships in the area, as the company reports, that are scheduled to pass through the Red Sea have already been instructed to reach safe areas and pause their journey until further notice.
