The crisis in the Red Sea has been going on for one year without showing signs of weakening due to the escalation of armed conflicts in the area. A situation from which Spanish ports have benefited from the reconfiguration of maritime trade routes, but which is not sustainable in the long term due to the serious extra costs it is generating in inputs. Namely, the price of maritime freight (cost of transportation) has already more than doubled since the end of 2023 after growing by 113% according to Bimco and the extra cost now amounts to 1.56 million euros, according to data from International Transport Forum.
These are figures collected by the company specialized in the port sector Ocean Capital Partners (OCP), which has carried out an analysis of the geopolitical instability in maritime freight transport and its consequences in Spanish ports. According to the document, the alternative route to the Red Sea through the Cape of Good Hope (Africa) is being presented as safer, but less “efficient” due to the increase in sailing days and its consequent impact on transport prices, What must be added is the increased cost of insurance and fuel.
According to OCP, for ships that circle the African continent and take the Atlantic route, the distance increases by about 3,000 miles (4,828 kilometers) and navigation takes around 10 more days, leading to delays in delivery times and increases in costs. navigation. “In addition, the accumulated delay of raw materials and goods at their destination points, caused by the long route and the shortage of vessels that travel it, also generates an increase in prices,” according to the analysis.
This is a situation that OCP manager, Marta Melcóndescribes this newspaper as “unsustainable” in the long term. «If current dynamics persist, the negative impact on the global economy will be inevitable, affecting both companies and end consumers. This increase has a direct impact on the price of products, making the final price more expensive for the consumer and fueling the inflationary cycle in the affected economies,” warns the expert. “In addition, additional insurance costs, longer transit times and increased fuel consumption only aggravate this situation, making the current cost structure unsustainable in the medium and long term,” he adds.
In the document, OCP analysts emphasize that, although in the short term freight traffic has remained robust worldwide due to companies’ contingency plans in the face of the expected extension of the conflict, in the long term the This situation could lead to the weakening of the transportation network, generating “real supply problems” with “globally relevant” economic consequences, in addition to changes in the geopolitical situation that would affect the “dynamics” of global transportation between East and West.
The expert firm in the port sector emphasizes that for shipping companies, choosing the Red Sea route right now means, in addition to the risk, an increase in the cost of insurance premiums for ships. Added to the cocktail of rising prices is the situation in the Panama Canal caused by drought, which has also led to restrictions on maritime traffic.
Spanish ports
However, so far Spanish ports have been able to take advantage of the situation. As this newspaper already reported, the reorientation of maritime routes towards the Cape of Good Hope has turned our country into Europe’s gateway to Asia.
According to data from State Ports, until September maritime traffic in Spanish ports has increased by 3.1% to exceed 422 million tons. For OCP, the biggest beneficiaries have been the locations of Algeciras, Valencia and Barcelona, which have emerged as key redistribution platforms for container transit to the rest of the Mediterranean and the ports where ships that previously crossed the Canal stopped. Suez. Although it is also noted that the docks of the Canary Islands and Ceuta have benefited by providing fuel refueling service to deep-draft vessels, given the lack of preparation of some African ports to serve this type of vessels.
According to figures published by State Ports Last week, in the first nine months of the year, general merchandise increased 6.9%, compared to 2023, with 210.9 million tons and TEUS (containers in transit) grew 11.8% compared to the same period of the previous year, with 13.7 million tons. The OCP analysis indicates that the Spanish port network is responding well to the needs generated thanks to the quality of its services and infrastructure. “There have been ports, for example, whose terminals have also had to operate at night in recent months and have enabled areas of their large cruise terminals to absorb part of the freight traffic,” the investigation details.
The forecast is that Spain will continue to benefit from the geopolitical instability in the Red Sea during the coming months, and traffic will continue to increase. Although the consulting firm emphasizes that national ports should apply logistical solutions to be able to manage traffic growth in the long term. OCP’s Melcón emphasizes that improvements must be made, especially in intermodal connection and digitalization. Regarding the first, he believes that it is essential to make advances in railway connections to transport goods more quickly and efficiently. “Integration with the European transport network, such as the TEN-T (Trans-European Transport Network) railway corridors, is a priority,” says the expert.
In the case of digitalization, Melcón focuses on the use of artificial intelligence, the internet of things and blockchain in logistics and customs management. “These advances will allow us to increase speed, traceability and security in merchandise management.” Likewise, as an element to modernize, the OCP manager advises betting on the automation of port operations, such as crane management and internal logistics, to “reduce costs, improve efficiency and reduce human errors.”
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