Attacks on shipping in the Red Sea by Houthi rebels in Yemen have seen a huge diversion of shipping from the Suez Canal passage to the route around the Cape of Good Hope. This has been to the benefit of African ports – but it could have been a much bigger bonanza for the continent. Mike Moon reports
Statistics tell the story. The number of vessels sailing around the southern tip of Africa is up by about 90% since late 2023.
This is due to shipping companies avoiding rocket and drone attacks in the waters off Yemen – the Gulf of Aden, the Bab al-Mandab Strait and the Red Sea. Houthi rebels controlling the Yemeni coastline have struck more than 70 vessels identified as owned by Western countries that they see as aligned with Israel in its war with Hamas rebels in Gaza.
The Suez Canal typically handles over 95% of ships travelling between Asia and Europe, facilitates about 30% of global container traffic and contributes to the movement of about 12% of global goods trade.
The United Nations reported that monthly transits through the Suez Canal were down by 37% year-on-year earlier in 2024 – but that number is likely to have grown in recent months as the attacks have continued.
The attacks have not been deterred by the US-led maritime task force that was created in mid-December 2023 or by waves of missile attacks by the US and UK directed against Houthi launch sites, radar installations and weapons storages.
Neighbouring Saudi Arabia has described the Western response as “pinpricks” and wants a concerted international effort to disrupt the flow of high volumes of weapons from Iran to Yemen.
The huge increase in shipping around Africa – to and from Asia, Europe and the Americas – has been a major boost for ports in Africa that can supply bunkering and restocking services.
The biggest beneficiaries are ports in South Africa, Madagascar, Mauritius, and Namibia, all of which have seen volumes rise, according to logistics company Fictiv.
“However, most ports in Africa are inefficient and not in the best condition to be able to fully realise all the benefits,” Vinny Licata, Fictiv’s head of logistics told news agency Bloomberg.
“This could be a real opportunity for Africa, but several ports were already congested due to inefficiencies. Investments are needed to enable them to compete.”
The International Monetary Fund’s current ranking of port efficiency around the world has 10 southern African facilities in the bottom 25 – with Cape Town and Nqqura occupying the last two slots at 404 and 405.
The Economist Intelligence Unit reports that Cape Town and Durban have benefitted from strategic location and relatively sophisticated port and logistical infrastructure. However, while South Africa may have picked up new business, inefficiencies, congestion and power supply issues have prevented its ports from fully exploiting the Red Sea crisis.
Bunkering services in Algoa Bay – at the ports at Gqeberha and Ngqura – are largely suspended because of a tax investigation.
Freight costs from Asia to the US East Coast have risen by 20% to 30%, with delivery times extended by two weeks due to the longer route around the Cape of Good Hope.
It’s here that South Africa’s inefficiency problems – stemming from chronic equipment breakdowns to staff shortages – hurt its competitive advantage, reports Bloomberg. Shipping companies using the Cape route have even started finding alternatives to the country’s maritime hubs.
The Economist agrees, saying South Africa’s problems have pushed some shipping companies to look further afield – benefitting Madagascar (Toamasina), Mauritius (Port Louis) and Namibia (Walvis Bay), which are strategically located on the east-west route connecting Asia with Europe.
Major ports in East Africa including Mombasa (Kenya), Dar es Salaam (Tanzania) and Beira (Mozambique) lie outside traditional shipping lanes connecting Asia with Europe but have also benefitted from increased traffic to and from ports in the Persian Gulf that are avoiding both the Red Sea and delays in South Africa.
West and Central African ports have seen less benefit, with the likes of Luanda in Angola, Douala in Cameroon, Lagos in Nigeria and Dakar in Senegal well equipped to handle extra traffic but lying too far outside shipping lanes to offer cost-effective restocking and bunkering services for the diverted Red Sea traffic.
It is not only commercial shipping that has changed course in the past year. Cruise liners are also steering well clear of the conflagration in the Middle East. It is here that South Africa has been cashing in – with passenger terminals less troubled by government red tape and labour issues and the country offering a welter of tourism attractions.
The Virtuosa – the biggest cruise ship to dock in a South African port – called at Durban’s Nelson Mandela Cruise Terminal earlier this year on a “technical stop”.
The vessel, which can accommodate over 6,300 passengers and 1,700 crew, is operated by MSC, which owns a major stake in the rebuilt passenger terminal. The facility will soon be hosting many other giant cruise ships – such as the Queen Mary 2, which was also recently in South African waters.
The Red Sea crisis shows no sign of abating.
Analysis by The Economist speculates that a separate war raging in Sudan, Africa’s third largest country, could complicate the issue.
Sudan has an 800km coastline on the beleaguered Red Sea and both Russia and Iran, players in various conflicts in the region, are agitating for naval bases in return for arming the Sudanese Armed Forces.
