Report Chamber of Shipping Final Copy

8/3/2019 Report Chamber of Shipping Final Copy

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TRADE FLOWS

IN THE NORTH

INDIAN OCEAN

AND THE

ECONOMIC

IMPACTS OF

SOMALI PIRACY

Final report

2011-03-30

Produced for:


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i

ContentsExecutive summary .................................................................................................................... 1

Container Trade. ..................................................................................................................... 1

Energy Shipping. ..................................................................................................................... 1Cars and Trucks. ...................................................................................................................... 1

Conclusion. ............................................................................................................................. 1

Introduction ................................................................................................................................ 2

Cargo categories and ship types ................................................................................................ 2

Total trade overview .................................................................................................................. 4

Containerised cargo ................................................................................................................ 7

Cars and trucks ....................................................................................................................... 8

Dry bulk cargo ......................................................................................................................... 9

Liquid bulk cargo ................................................................................................................... 10

Cruise ships ........................................................................................................................... 12

Trade with South East Africa ................................................................................................ 13

Cargo at risk .............................................................................................................................. 14

Diversion costs ......................................................................................................................... 15

Uncertainties ............................................................................................................................ 17

Copyright IHS Global Limited 2011. All rights reserved.

Limitation of liability:

IHS Global Limited Ltd., its affiliates and subsidiaries and their respective shareholders, officers, employees or agents are,

individually and collectively, referred to in this clause as the IHS Group. The IHS Group assumes no responsibility and shall

not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this

document howsoever provided, unless that person has signed a contract with the relevant IHS Group entity for the

provision of this information or advice and in that case, any responsibility or liability is exclusively on the terms and

conditions set out in that contract.


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2 IHS Fairplay, Sven Kllfelts gata 210, SE-426 71 Vstra Frlunda, SwedenPhone: +46 31 704 4330, e-mail: [email protected]

IntroductionThe objective of this report is to describe the scope of seaborne trade flows in the north

Indian Ocean and the economic impacts of Somali piracy. The approach used has been to

assess the total trade between Europe and those countries that either have borders to theIndian Ocean or are so located that ships would have to pass the Indian Ocean to get from

them to Europe.

The trade assessment has been matched with records of ship movements in order to see

which routes have been used for this trade.

Cargo categories and ship typesThis report covers trade in goods that may be carried by ship but does not include goods that

are exclusively carried by other transport modes. The goods have been divided into different

cargo categories to match the seaborne trade alternatives that exist.

The cargo categories covered in this report are containerised general cargo, vehicles (cars

and trucks), dry bulk commodities (mainly ores, coal, grain, scrap and steel) and liquid bulk

commodities such as crude oil, refined oil, gas and chemicals. The source for the trade

statistics is the World Trade Service provided by IHS Global Insight.

The ship types that have been included for the carriage of the above mentioned cargoes are

container carriers, general cargo carriers, vehicle ro-ro carriers, dry bulk carriers, oil tankers,chemical tankers and gas tankers (LNG & LPG). In addition, there is section on the cruise

shipping market. The ships characteristics have been based on Lloyds Register of Ships and

the ship movements have been derived from AISLive1 data; both sources are provided by IHS

Fairplay.

The assessments comprise all seaborne trade and ship movements between North, West

and South Europe and the regions of East Africa, the east Middle East and Asia, comprising

South Asia, East Asia, and the South Pacific (Australia and New Zealand) as illustrated in

Figure 1 below. These countries have borders on the Indian Ocean or are so located that

ships serving them have to pass through the Indian Ocean to get from them to Europe

meaning these ships are within the reach of Somali pirates.

The route shown in red passes through the Suez Canal. In most cases this is the preferred

route since it is the shortest distance. However, using it means that ships pass through the

Gulf of Aden and off the coast of Somalia and are therefore exposed to the risks of piracy.

1

Restricted by the IMO regulation on the requirement to carry an AIS transponder, which generally includes allseagoing cargo vessels of 300gt and above and all passenger vessels.


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The risk area has increased as the pirates have extended their operations to the entire North

Indian Ocean.

The alternative route is shown in blue. Ships taking this route avoid the Gulf of Aden and

instead go via the Cape of Good Hope in South Africa. This route is longer in many cases

significantly longer resulting in an increase of transport time and costs.

It is important to note that the alternative route is only available as an option to ships

trading in the South Pacific, East Asia or the eastern part of the South Asia region. Trade

from the major regions described here as East Africa, the east Middle East and the west of

South Asia are unable to avoid passage through the North Indian Ocean, consequently trade

and ships from these regions have no safe route out but through the high risk area.

Figure 1: Map showing the regions and routes referred to in this report

The following sections describe the volume, value and route choice of trade using different

types of ship. This is followed by a section on the costs associated with diversion around the

Cape of Good Hope.

The Source for Maritime Information and Insight

Preferred route via Suez & the Gulf of Aden

Alternative route via the Cape of Good Hope

N&W

EUROPE

S EUROPE

EAST

ASIASOUTH

ASIA

SOUTH

PACIFIC

EAST

MIDDLE

EAST

EAST

AFRICA

Two ships out of three passing the dangerzone are carrying European cargo


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Total trade overview

Total seaborne trade totaled $1,159Bn. Containerised cargo $992Bn Total UK trade reached $147Bn of which $130Bn in containers

Europes imports in 2009

totalled $686Bn. All kinds of

commodity were imported, but

clothes, electronics,

manufactured goods, cars,

energy and construction

commodities dominated.

Figure 2: Europes imports in 2009, billion dollars

European exports reached$473Bn of which special

industrial machinery, engines,

turbines, cars, chemicals, drugs,

medicines, iron and steel

accounted for a significant part.

Figure 3: Europes exports in 2009, billion dollars

Table 1 provides an aggregate view of the total European trade with the regions defined

above in 2009. All in all, there were 386M tonnes of cargo transported by sea and the total

The Source for Maritime Information and InsightN&W

EUROPE

S EUROPE

EAST

ASIASOUTH

ASIA

SOUTH

PACIFIC

EAST

MIDDLE

EAST

EAST

AFRICA

Clothes

Electronics

Manufactured goods

Cars

Energy commodities

Construction commodities

...etc

$686 Bn

The Source for Maritime Information and InsightN&W

EUROPE

S EUROPE

EAST

ASIASOUTH

ASIA

SOUTH

PACIFIC

EAST

MIDDLE

EAST

EAST

AFRICASpecial industrial machinery

Engines & turbinesCars

Chemicals

Drugs & medicines

Iron & steel ......etc

$473 Bn


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value of that cargo amounted to $1,159Bn. Imports to Europe dominated in both volume

and value.

Containerised general cargo was by far the largest cargo category in monetary terms,

amounting to $992Bn. Liquid bulk cargoes accounted for $85Bn and 130M tonnes. Vehicles,

such as cars and trucks, are voluminous high value cargo and the value of their transport

reached $62Bn in 2009. There were 80M tonnes of dry bulk cargo shipped between the

regions in 2009, which is a significant operation in volume terms.

Table 1: European trade with Asia, eastern Middle East and East Africa shipped either via the Gulf of Aden or the Cape of

Good Hope, 2009

Of the total transported, 82% by value and 66% by volume passed through the area of the

Gulf of Aden. That means goods with a value of as much as $952Bn were exposed to the risk

of piracy.

Containerised cargo was the highest value category of the cargoes that were transported

around the Cape of Good Hope in 2009, accounting for $151Bn of the $207bn on this route.

Containerised cargoes between South Europe and Southeast Africa had the highest share of

the total containerised trade going via the Cape. This is also the region with the shortest

deviation distance. In volume terms, however, dry bulk cargoes dominated on the Cape

route, with 70M tonnes being carried.

Thousand tonnes, 2009 Imports Exports Total UK

Containerised general cargo 97,015 74,078 171,093 23,445

Cars and trucks 2,207 2,069 4,276 522

Dry bulk cargo 61,259 18,626 79,885 9,806

Liquid bulk cargo 110,421 20,436 130,857 7,773

Total 270,903 115,209 386,111 41,546

$Bn, 2009 Imports Exports Total UK

Containerised general cargo $580 $411 $992 $130

Cars and trucks $31 $31 $62 $7

Dry bulk cargo $12 $7 $20 $3

Liquid bulk cargo $62 $23 $85 $7

Total $686 $473 $1,159 $147


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Table 2 presents the trade that cannot avoid the Somali piracy via diversion, i.e. trade with

eastern Middle East, western part of South Asia and East Africa.

$275Bn or 24% of the total value must continue to trade through the high risk area. More than 90% of total liquid bulk cargo imports cannot avoid piracy.

Table 2: European trade with South Asia, eastern Middle East and East Africa, 2009

Thousand tonnes, 2009 Imports Exports Total UK

Containerised general cargo 21,193 24,162 45,355 6,102

Cars and trucks 120 869 989 124

Dry bulk cargo 3,022 13,706 16,728 1,436

Liquid bulk cargo 100,941 7,612 108,553 4,231

Total 125,275 46,350 171,625 11,892

$Bn, 2009 Imports Exports Total UK

Containerised general cargo $74 $134 $209 $29

Cars and trucks $1 $10 $11 $1

Dry bulk cargo $2 $3 $5 $1

Liquid bulk cargo $45 $6 $51 $3

Total $122 $153 $275 $34


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Containerised cargo

Europes containerised trade totaled $992Bn At least $840Bn exposed to risk of piracy The average ship from East Asia is a >$100 million investment that carries $430

million worth of cargo each time it passes the Gulf of Aden Red Ensign flagged ships made 111 trips to Europe

Since the introduction about half a century ago the use of containers in the global transport

system has developed strongly. The large service network makes it possible to ship goods

across the world at a low cost. Today, most types of cargo are to varying degrees

transported in containers ranging from high value electronics to low value scrap steel or

recycled paper.

In 2009, the year of the great recession, Europes containerized trade totaled $992Bn.

Imported goods dominated with $580Bn and about 1/3 of the goods were either wearing

apparel or various kinds of machinery or equipment such as computers or mobile phones.

European exports of containerised goods reached $411Bn of which more than half were

sophisticated machinery, equipment, engines, steel or medicines. High value consumer

goods is another export goods category that is of importance.

The share of the traffic that passed through the Gulf of Aden was 85%, indicating that some

$840Bn worth of cargo was exposed to the risks involved in passing that area.

Table 3: European trade in containerised cargo, 2009

Trade with countries in East Asia clearly dominated and China was by far the largest trading

partner.

The share of the total cargo carried by ships belonging to any of the Red Ensign Group2

vessels is calculated to almost 12M tonnes of cargo for container vessels. This equates to

$69Bn.

2The Red Ensign Group, in addition to the United Kingdom consists of the shipping registers of each of the

following: Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Guernsey, StHelena, Isle of Man, Jersey, Montserrat and the Turks and Caicos Islands.

East Asia

East Mid

East SE Africa South Asia

South

Pacific Total

Trips to

Europe by

Red Ensign

ships

Trade: European imports & exports

Million $ $744,753 $96,494 $22,996 $89,088 $38,379 $991,710

Thousand tonnes 117,220 20,156 6,653 18,546 8,518 171,093

of which transported by Red Ensign

flagged vessels $50,490 $8,834 $355 $9,204 $0 $68,883 111


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Cars and trucks

European exports match imports. Cars and trucks to a value of $46Bn were at risk of piracy

Imports and exports of different kind of vehicles are mainly handled by purpose-built ro-ro

carriers, which go under different descriptions such as vehicle ro-ro carriers, pure car carriers

(PCC) or pure car and truck carriers (PCTC).

The largest ships carry the equivalent of more than 8,000 cars per trip and the average one

on the route carry about 6,000. The cargo value of such a shipment exceeds $100 million. In

2009 there were more than 250 voyages to Europe and equally many in the other direction.

Countries in North Western Europe lead the exports with Germany, UK and France at the top

followed by Slovakia and Sweden. Imports are to a large extent taken from Japan and South

Korea.

Europe imports more vehicles than it exports, but the average value of exported vehicles is

higher so this trade is the only one that is balanced - $31Bn in both directions.

In 2009, 4.3M tonnes of vehicles were transported between the defined regions, indicating

that the number of vehicles carried was almost as many. Vehicles are high value cargo so

even if the cargo tonnage is small compared to the other shipping segments, the value of

this cargo is high. Of the total traffic, 74% passed the Gulf of Aden, leading to a risk exposure

indication of $46Bn. The share of transport carried by Red Ensign-flagged ships was $5Bn.

Vehicle roro carriers also transport a lot of project cargoes, which include construction

equipment, parts and modules for power plants and wind mill farms. The value of this trade

is significant but has been excluded from this assessment.

Table 4: European trade in vehicles, 2009

East Asia

East Mid


South

Pacific Total

Trips to

Europe by

Red Ensign

ships


Million $ $46,193 $8,982 $681 $1,564 $5,045 $62,464Thousand tonnes 2,902 725 114 150 386 4,276


flagged vessels $3,242 $337 $37 $152 $1,429 $5,197 15


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Dry bulk cargo

Europes trade with dry bulk cargo is a $20Bn and 80M tonnes business $2.5Bn passed through the high risk area

The majority of the capacity of the fleet of dry bulk carriers is dedicated to transporting iron

ore and coal, which are raw materials that are crucial for the energy and construction

sectors. Much of the smaller bulker fleet, exceptfor those transporting grain, is used for the

transport of other materials relating to construction such as steel, cement, sand and gravel.

Much of the European dry bulk imports consist of coal and iron ore from Australia and

Indonesia to feed into Europes steel industries. European exports consist to a large extent of

scrap to China, India, Taiwan and grain to the Middle East.

Table 5: European trade in dry bulk cargo, 2009

Dry bulk cargo is to a large extent the opposite of containers and vehicles in that it is of high

weight and relatively low value. That said, the value of the trade still amounted to $20Bn for

the 80M tonnes carried.

Only 13% of the traffic passed through the Suez Canal and thereby also the Gulf of Aden.

This is due to the size of the vessels employed on the routes. Almost all vessels from the

South Pacific go via the Cape of Good Hope while the vessels from or to South Asia and the

Eastern Middle East to a larger extent utilise the Suez Canal as the vessel size on this route is

smaller.

The share of the traffic carried by Red Ensign-flagged ships was $0.9Bn.

East Asia

East Mid


South

Pacific Total

Trips toEurope by

Red Ensign

ships

Trade: European imports & exports (excl general cargo)

Million $ $8,844 $1,974 $814 $1,765 $6,421 $19,817

Thousand tonnes 26,299 10,962 1,512 4,254 36,858 79,885


flagged vessels $578 $48 $45 $53 $181 $905 6


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Liquid bulk cargo

$85Bn worth of crude oil, refined oil, chemicals and gas shipped to and from Europe $62Bn passed through the high risk area

o $24Bn crude oilo $20Bn refined oilo $12Bn chemicalso $7Bn liquefied natural and petroleum gases

There were 131M tonnes of liquid bulk cargo transported in 2009 between Europe and the

countries defined in Asia, the Middle East and East Africa. Crude oil dominated, followed by

refined oil products, chemicals and gas. The total value of this trade amounted to $85Bn.

Oil tankers carry crude oil from the original source to the refineries and refined products

from the refineries. The larger ships are mostly the ones carrying crude, but the

development is that it happens more often that 100,000 dwt ships also carry some kind of

refined product.

Trade in crude oil amounted to 80M tonnes and $33Bn. The largest share of the trade was

between the Eastern Middle East and Southern Europe, particularly to Italy.

The Suez Canal route dominated, carrying $24Bn of the total crude oil trade. Three percent

of the traffic was performed by Red Ensign vessels. The UK share of the trade value was

$0.4Bn.

Table 6: European trade in crude oil, 2009

The trade in refined oil products is also dominated by countries in the Eastern Middle East,

but trade with countries in East Asia was almost as large in 2009. It is mostly countries inNorth and West Europe that have a cross-trade in different products with East Asian

countries.

The total value of the refined oil trade in 2009 amounted to $15Bn. Of this, 74% passed

through the Suez Canal and thereby the Gulf of Aden, indicating that $11Bn was at risk. The

Red Ensigns share of the traffic was 6% and the UK share of the trade value was $4Bn.

East Asia

East Mid


South

Pacific Total

Trips to

Europe by

Red Ensign

ships


Million $ $548 $32,431 $51 $111 $16 $33,157

Thousand tonnes 1,201 78,184 187 335 35 79,941


flagged vessels $30 $975 $0 $0 $4 $1,009 17


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Table 7: European trade in refined oil, 2009

*4 trips by products tankers and 39 trips by chemical/product tankers

The pure chemical tanker fleet transports highly sophisticated chemicals, like acids and

sulphuric products, which require that cargo-tanks are built in non-corrodible materials.

The volume of the chemicals trade was 10M tonnes smaller than the refined oil trade, but

the value was more than twice as much, at $35Bn. The UK share of the trade value was 8%.

Chemicals are transported in relatively small vessels since the batch sizes are generally muchsmaller. As with refined oil, the share of trade via the Suez Canal was 74% and the Red

Ensign group had no part of this trade.

It should be mentioned (see also the section Uncertainties on page 17), that the distinction

between commodities within the trade as well as the overlap between vessel types makes it

challenging to allocate cargo to ships in precise detail.

Table 8: European trade in chemicals, 2009

Gas transport covers Liquefied Petroleum Gas (LPG), which is butane, propane or blends

thereof, and Liquefied Natural Gas (LNG). LPG ships also carry petrochemical and hydro-

carbon gases such as ethylene, ethane and polypropylene.

LPG and petrochemical gas trade dynamics shifted substantially in 2009, as the US became a

net exporter, and Japanese demand slumped. A new surge in LPG supplies from producers in

the Middle East and even West Africa are contributing to the increase in LPG exports in the

market.

Cold weather increases LNG demand and for instance the UK set a monthly record last

winter. The UKs natural gas storage capacity is low so imports from Norway by pipeline and

Qatar by ship are important.

East Asia

East Mid


South

Pacific Total

Trips to

Europe by

Red Ensign

ships


Million $ $6,111 $6,649 $151 $2,417 $92 $15,420Thousand tonnes 10,886 11,899 228 3,699 113 26,824


flagged vessels $389 $353 $6 $157 $0 $905 4/39*

East Asia

East Mid


South

Pacific Total

Trips to

Europe byRed Ensign

ships


Million $ $26,517 $3,149 $661 $3,842 $813 $34,982

Thousand tonnes 9,128 3,315 943 2,567 512 16,465


flagged vessels $0 $0 $0 $0 $0 $0 0


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Table 10: Seasonal reallocation of cruise capacity, 2009

Trade with South East Africa

The East African countries namely Kenya, Tanzania and the landlocked countries to the west

of their borders, such as Uganda, also to a lesser extent Sudan and Ethiopia have substantial

trade with UK and other EU countries. Diverse commodities generate vital export income

while imports of other commodities such as refined petroleum are essential. Statistics for

these trades are not easily available or analysed. Table 11 illustrates some export volumes

but the importance of trade to this region currently at risk to piracy should not be under-

estimated.

Europes trade volumes with the countries in South East Africa dropped significantly in 2006-

07. It was Europes export of grain and sugar in 2007 that were the most marked changes,

down by 1.3 million tonnes. The United Kingdoms grain exports fell by 39,000 tonnes. The

drop in volumes were recovered in 2008 and continued to grow in 2009.

Table 11: European exports to SE Africa, tonnes

0

50

100

150

200

250

300

350

400

450

500

Q1 Q2 Q3 Q4

Cruiselowb

erthcap,

byregionandweek,

2009

Mediterranean Baltic Asia/Australia Carib/EC. N. America Atlantic Arctic Sea Pacific/Alaska Other/Idle

Commodity 2005 2006 2007 2008 2009Grain 546,788 1,146,905 306,902 1,827,954 1,908,705

Sugar 155,261 521,050 34,333 30,508 31,759

Vegetables, Fruits and Eggs - req Refrigeration 12,360 82,881 13,640 15,816 16,632

Petroleum Refineries 213,858 286,042 235,662 372,274 374,984

Motor Vehicles 98,080 125,165 92,441 64,017 60,438

Transport Equipment, nec. 38,620 42,993 16,200 15,969 17,137

Ores and Scrap 43 26,815 60 322 343

Vegetables and Fruits - non-Refrigerated 79,978 78,086 54,209 27,614 28,124

Wood Products 30,763 39,961 18,819 36,892 31,585

Fertilizers and Pesticides 267,970 396,910 379,088 545,193 569,390

Paper and Paperboard and Products 138,869 121,392 106,538 113,038 109,491

Oil Seeds 14,553 17,979 3,562 11,923 12,993

Other commodities 1,521,527 1,472,377 1,661,955 1,878,809 1,920,657

Grand Total 3,118,670 4,358,556 2,923,409 4,940,329 5,082,238


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Cargo at risk

Cargo worth $952Bn passed through the high risk area in 2009 Containerised cargo dominated followed by liquid bulk cargoes and vehicles Ships destined for Europe made 3,300 trips through the Gulf of Aden

All shipments via the Suez Canal have to pass the Gulf of Aden and are thus exposed to the

risk of piracy in this region. Shipments to and from countries in the East Middle East and the

western parts of South Asia cannot avoid the Somali pirates. Shipments to and from

countries in the eastern part of South Asia and East Asia will have to make a significant

detour in order to be out of reach of the pirates in the Gulf of Aden if they choose the route

round the Cape of Good Hope.

$952Bn of the total seaborne trade passed through the high risk area in 2009. Cargo in

containers represented $841Bn hereof, cars and truck $46Bn, liquid bulk cargo $62Bn and

dry bulk cargo $3Bn.

This gives an average daily risk exposure of $2.6Bn.

Table 12: Value of total trade and trade via the Suez Canal, 2009

The design of vehicle ro-ro carriers makes them more difficult for pirates to hijack, on

account of their relatively high speed and high freeboard. Container vessels are also less

exposed to the risk, on account of their high speed. It is much more difficult to board a ship

doing 24-25kt. Pirates have so far focused their attacks on liquid and dry bulk carriers,general cargo and ro-ro ships. There are, however, recent reports that the pirates have

scaled up their operations and employed larger vessels for their attacks, which may in the

future facilitate boarding of container and vehicle carriers.

$Bn, 2009 Total Via Suez

Containerised general cargo $992 $841

Cars and trucks $62 $46

Dry bulk cargo $20 $3

Liquid bulk cargo $85 $62

Total $1,159 $952


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Diversion costsDiversion is in reality only an option for trade with countries in the eastern part of South

Asia, East Asia, the South Pacific and in the South East part of Africa. Trade with countries

located in the East Middle East and in the western part of South Asia cannot avoid theSomali piracy.

Figure 4: Diversion; primarily only an option for Eastern South Asia & East Asia

Choosing to switch route to avoid the risks in the Gulf of Aden is, in most cases, a costly

choice. Such a decision has an impact on many factors and some of the key ones are listed

below. The list is not complete, but it highlights some of the obvious and important issues.

The impact of changing route from the Suez Canal to round the Cape of Good Hope involves:

Longer distance and therefore longer transport lead time Charter cost increases as a consequence of longer transport time Bunker fuel cost increases as a consequence of longer distance Manning cost increases due to longer transport lead time Lower insurance costs due to avoidance of the risk area No Suez Canal toll The impact of longer transport lead times on cargo owners/shippers.

Each of these has a significant impact on overall costs. It should, however, be recognised

that if significant parts of the trade were to switch route then some dynamic factors would

come into play as a consequence of the changed demand for transport. Longer distances

EAST

ASIA

SOUTH

ASIA

EAST

MIDDLE

EAST

EAST

AFRICA


18/20


increase the demand for transport capacity and this will have an impact on freight and

charter rates.

The impact of increasing demand could also be significant if the degree of capacity utilisation

was high, or close to high, before the change. In that case, the cost of diversion may increase

more than is indicated below. A falling number of passages through the Suez Canal may also

result in decreasing Canal tolls. The net effect of the two is believed to be that costs will

increase.

Generally, the lowest costs for diversion are for ships trading with the South Pacific and

Eastern Africa, mainly because the detour is much shorter than for the other regions.

Costs included in the calculations below are:

Extra charter cost Extra fuel cost Savings in risk insurance for the Gulf of Aden Savings in Suez Canal toll.

Bunker fuel costs in 2009 were much lower than they are today, which has an impact on fuel

costs. Average speed for vessels was lower in 2009 than it normally is. This has an impact on

fuel consumption and thereby fuel costs, and also on the extra number of days at sea.

Based on the above, indications of costs have been calculated for rounding the Cape of Good

Hope instead of passing through the Suez Canal. The calculations are for average-sizedvessels currently trading on that route. The variation from these figures could therefore be

substantial, both up and down, should another size vessel be chosen.

Container carriers call at several ports for both loading and discharging and this partially

explains why there is trade on a costlier route. The vessels are constrained in their choice of

route by the location of their cargo ports. To some extent this is also the case for vehicle

carriers.

The figures below are averages for the trade. Thus it could still be financially favourable to

sail via the Suez Canal for cargo destined for the eastern part of the Mediterranean. On

shorter distances, smaller vessels are usually employed, which also changes the figures.

Almost all container ships passed through the Suez Canal in 2009, which makes sensesince the alternative route around the Cape of Good Hope adds significantly to the

costs for the trip. For the average sized container vessel the additional cost has been

calculated to $185,000-$299,000 per trip.

For vehicle carriers, the additional cost has been calculated to range between$24,000 and $128,000 per trip for the average vessel.


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Crude oil shipments are from the Middle East only and thus cannot avoid the riskarea.

The diversion cost for refined oil shipments is in the range $75,000 to $186,000depending on route. The average sized vessel is large for a refined product carrier,

but this is due to the long haul.

Table 13: Average diversion costs per major vessel type and trip for the average vessel size. Share of total traffic that

passed through the Suez Canal and thus the Gulf of Aden in 2009.

UncertaintiesIn some cases it is difficult to allocate cargo categories to the ship types that carried that

cargo with certainty. The reason for this is that there is not only one transport solution for

each commodity.

Figure 5: Illustration of the relation between trade and mode of transport

There are, for instance, various chemical commodities that can be transported by both LPG

tankers and chemical tankers. There are also a number of refined oil products that are

carried by oil products tankers and by chemical/product tankers.

Vessel type Size Suez

Containerised general cargo 4,200 teu $185,000 - $299,000 85%

Cars and trucks 6,000 ceu $24,000 - $128,000 77%

Dry bulk cargo 85,000 dwt $36,000 - $92,000 16%

Refined oil cargo 75,000 dwt $75,000 - $186,000 61%

Note: Size ref ers to average vessel size on route w here teu=tw enty foot equivalent unit, ceu=car

equivalent unit, dw t=deadweight tonnes. Suez is the share of total traffic passing the Suez Canal.

Cost range

TOTAL EXPORTS

General Cargo Liquid Bulk Cargo Dry Bulk Cargo

Roadonly

Truck/traileronferry/ro

ro

Seaborneunitised(cont.

etc)

Seabornegeneralcargo(non

-unitised)

Railonly

Airbornetransportonly

Seaborneliquidbulk

Pipelineonly

Seabornedrybulk

TOTAL IMPORTS

General Cargo Liquid Bulk Cargo Dry Bulk Cargo

MODEOFTRANSPOR

T


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There are other areas where there is an overlap of transport solutions in the general cargo

segment. Some cars, for instance, are carried in containers. Vehicle ro-ro carriers are quite

heavily involved in the transportation of project cargoes, such as wind turbine modules.

Much cargo that is containerised could also be transported as breakbulk or even bulk cargo.

Examples are refrigerated cargoes such as fruit, or scrap steel.

Different types of products and services have been developed for each segment. The

services offered could be standardised or client-specific (differentiated). There are several

different ways to meet demand for transport. The figure below illustrates the mix of

offerings on dry cargo shipments.

Figure 6: Illustration of seaborne transport solutions within the dry cargo segment

Uncertainties also exist within the trade data. The origin of this data contains no information

about transport mode. The classification of commodities in official reports is sometimes not

as consistent as could be expected.

Short sea/Short haul

Deep sea/Long haul

Bulk vessels

Container

Vehicle ro-ro

ContainerGeneral cargo

Reefers

Ro-ro

Major bulk

Minor bulk

Refrigeratedcargo

New cars &trucks

Awkward &project cargo

Other mediumvalue cargo

Other high valuecargo

CARGOT

YPES

Ferry; cargo

Report Chamber of Shipping Final Copy

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