Issue 12

HOT SEAT (1): 

Interview with Johan-Paul Verschuure – Director of Rebel Ports and Logistics

An InDepth Analysis of the Impact of the Red Sea Crisis in MEDPorts 

  • Rebel is a 300 consultants large global financial-strategic advisory firm across infrastructure sectors based in Rotterdam. The port team works in the global port and shipping domain for major terminal operators, port authorities, investors and IFIs. How do you see the future of the port sector in the region?? 

The port sector in the West-Med has a bright future being on a junction of the major shipping routes – connecting Asia, Europe and the Americas. The vulnerability of the Suez Canal passage will make the region a popular point for transshipment activity, even if the situation stabilizes. In addition, liners will consider their options of securing strategic capacity in the region – in particular those without a good foothold in the region. It is noted that there are several capacity additions planned which could – if running out of sync with the demand growth – could lead to more competition if demand shifts back. 

  • Now that we are approaching the end of the year’s first semester? can you please summarize for us which has been the main changes in terms of container port calls in the Mediterranean due to the crisis in the Red Sea? 

Mainline vessels from liners without a foothold in one the major hubs in the West Med needed to look for spare capacity at other West Med ports, with Algeciras and Tanger Med already highly utilized before the disruptions starting. At Algeciras growth was modest, and Tanger Med saw growth due to increased parcel sizes. Some major lines could divert to Valencia and Sines where these liners had an equity stake and capacity was available. Other liners without stakes there turned their eyes to Barcelona where capacity was available. Less fortunate liners even had to feeder cargoes back into the Med from more remote hubs in North West Europe in some instances. Cosco to Piraeus was an example of this. Central Med hubs are struggling with dropping transshipment volumes as well.

  • The Red Sea Crisis and the diversion of ships through the Cape of Good Hope has shifted some volumes from Eastern to Western Mediterranean ports. Which have been the main winners and losers so far? 

Overall the market has been strong in the last two months seeing growth across markets in general vis-à-vis 2023 due to a recovery of gateway demand, as well as seemingly frontloaded demand – partly due to rushing to avoid import tariffs, strikes and rapidly increasing congestion levels. Sines and Barcelona are key winners with absorbing rerouted services, but also Valencia and Tanger Med saw above market growth rates. Pireaus saw a strong decline in volumes in recent months with Cosco reshuffling their services into the Med.

  • The Red Sea Crisis has been provoked by the war in Gaza, one of the worst tragedies of the century and  we all hope it will end soon.  If and whenever it happens, do you think shipping lines will go back to the pre-war situation or some changes might remain? 

The shipping industry has a strong focus on cost competitiveness. When passage would be safe again, the Suez canal will be a favourable option again as the alternative is too expensive to be competitive – depending on the pricing strategy of the Suez Canal authority. Also from a perspective of reducing global emissions the route via Suez would be preferred. However, the second major disruption in the global supply chains driving up freight rates in a short space of time, must have further underlined the importance of resilient supply chains. As such the case of operating at lower utilization rates at terminals, securing strategic port capacity and perhaps operating with a system with interchangeable hubs will be more defendable. For these considerations the West Med is ideally positioned having multiple connection possibilities.