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South Korea asks shipping companies to steer clear of Red Sea

The rerouting has led to a doubling of freight rates from South Korea to Europe since late November

Lloyd’s List Intelligence data shows that none of HMM’s Asia-Europe boxships are present in or heading to the Red Sea region, while four of its vessels from the Americas have also opted for the longer route

SOUTH Korea’s government has asked shipping firms to avoid sailing through the Red Sea because of escalating tension in the region.

The Ministry of Trade, Industry and Energy issued a statement on Thursday after holding a meeting with shipping companies and industry associations.

“Given the geopolitical risks in the Red Sea, we have asked shippers to consider diversions as the safety of our vessels and export products come as the top priority,” said Jo Eek-no, director-general for international trade policy at the ministry.

The meeting came against the backdrop of Houthi forces in Yemen attacking commercial vessels in one of the world’s most important waterways since November.

The rerouting caused by the tensions in the Red Sea and drought at the Panama Canal has resulted in increased freight rates, the ministry said.

It said that between November 17 to December 28, rates from Busan to the US east coast rose from $2,398 to $3,041 per feu, while rates from Busan to Europe surged from $1,199 to $2,495 per feu.

CMA CGM recently announced its Asia-Mediterranean rates for all freight will rise to $3,500-$3,650 per teu or $6,000-$6,300 per feu from January 15.

HMM, South Korea’s largest carrier, earlier this week has added more tonnage on Asia-North Europe/Mediterranean trade to its list of vessels being rerouted via the Cape of Good Hope.

Those include nine HMM ships and 14 run by its The Alliance partners.

Lloyd’s List Intelligence data shows that none of HMM’s Asia-Europe boxships are present in or heading to the Red Sea region, while four of its vessels from the Americas have also opted to reroute via the longer route.

The ministry also stated that there have been no notable disruptions in the supply of crude oil and liquefied natural gas.

 

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