According to Port Network Authority Managing Director Matteo Paroli, interviewed by Telegranducato, the substantial blockade of the Red Sea will have a limited impact on traffic to and from the port of Livorno. The new car business will suffer the most.
“As far as vehicles are concerned, we have many lines with the Far East,” he explains. “The increasing tendency for a lot of ships to avoid the Suez transit for security reasons poses a threat to our new car trade. Re-routing traffic by circumnavigating Africa will affect global supply chains. We foresee heavy congestion on our port quays over the next few months due to delayed deliveries and a build-up of ships waiting to disembark.”
Between January and October, Livorno port handled 456,000 new cars, 14% more compared to the same period the previous year. The car carriers that call at the port of Livorno operating services to the Asian markets are Hoegh Autoliners, Nik Line, MOL and Neptune.
As far as our box traffic is concerned, on the other hand, the impact of the Middle East crisis will be rather limited: “We might experience some disruption, but it has to be said that the port of Livorno has commercial ties above all with the United States. It has very few connecting services with the Far East.”
The international scenario and the escalation of Houthi attacks on merchant ships worry Paroli: ‘The initial forecast, was, as we all tended to think, that this crisis would be over in three-to-four weeks. That was not the case,” he says.
Paroli points out that the shipping companies’ decision to circumnavigate Africa has resulted in a moderate increase in shipping costs, amounting to 15-20% of the total. In fact, the longer transit time and the extra costs for fuel have been counterbalanced by the lack of canal tolls for transiting from Suez, which are very expensive.
“Strangely enough, shipping rates on the east-west routes that normally use the Suez Canal have increased considerably more,” explains the Managing Director of the Port Authority. Daily freight rates on the Freightos Baltic Index (FBX) from Asia to Northern Europe have indeed risen by 226% since mid-December, to $ 4789 per FEU, while those on the Asia-Mediterranean route have peaked at 116%, at $5202 per FEU.
“It would be justifiable for supervisory authorities to intervene to verify whether there are any speculative ploys aimed at altering the correct market balance” he concludes.
Translation by Giles Foster