Industry News

Circum-Africa routes and ship size dynamics: space costs and the impact of network disruptions


According to the latest Marine Intelligence report, all else being equal, the longer the voyage around Africa, the higher the fuel consumption and therefore the cost of space.

The Danish shipping data analytics company said that assuming these ships are fully utilized, deploying larger, more energy-efficient vessels should reduce these increased space costs.

"If we look at the average ship size in Asia-North Europe, there is modest fluctuation, but the trend line is almost completely horizontal, meaning there is no change in the average ship size," the analysts noted.

In the Asia-Mediterranean region, there is a clear upward trend, but this started in the second half of 2023, well before the first Houthi attacks in the Red Sea. On the same route, the average ship size of 2M and the Alliance remained stable, while Ocean Alliance's ship size increased sharply after the first attack in the Red Sea before declining to a baseline in early 2023, suggesting that these changes were mainly due to network disruptions Rather than being systemic.

Alan Murphy, CEO of Sea-Intelligence, noted: “Just looking at the average size of a ship is often not enough as it can be affected by outliers at either end of the range.”

Looking at the median ship size in Asia-North Europe, the median ship size of 2M almost exactly matches the average ship size. For Ocean Alliance, we see that the decrease in average ship size in February 2024 is due to outliers, without outliers, average ship size remains stable. For THE Alliance, we see a significant deviation between the average and median vessel sizes, almost exactly matching the start of the circum-Africa voyage.

Murphy said this was due to the discontinuation of FE5 because the average size of FE5 ships is smaller. Murphy emphasized that "this is not a direct expansion of the size of deployed ships in order to reduce the average space cost, but all other things being equal, suspending service can still achieve this goal by removing ships with lower average space costs."

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