Kenya shipping costs set to rise

Containers at the port of Mombasa, Kenya. Photo/ Courtesy

By The East African

Kenya Ships Agents Association (KSAA) on Wednesday said importers should expect higher charges from this week as stakeholders assess the increasing insecurity from Yemen Houthis’ claim of fresh Red Sea attacks on British and American ships.

KSAA Chief Executive Officer Juma Ali Tellah said shippers are concerned about the escalating conflict along the Red Sea route, and its potential repercussions on the business community and consumers in East Africa.

The worry was always expected to bring a new burden. But the actual cost increment wasn’t known since December when Houthis first fired the first missile.

“Despite efforts to normalise freight rates following events such as the Covid-19 pandemic and the Russia-Ukraine War, the ongoing attacks by Houthi Rebels present a persistent challenge.”

“Major shipping lines, including those represented by KSAA, are responding by rerouting vessels around the Cape of Good Hope, a costly alternative that directly impacts the business community and consumers in East Africa,” said Mr Tellah.

He added, “The rerouting of ships will result in longer shipping distances, causing an upward surge in freight rates and disturbances in the supply chain. Delays in the smooth movement of goods are expected due to extended transit routes.”

Mr Tellah also said the attacks will have long term effects to the freight business considering the delay in reshipment of empty containers.

“We have experienced reduction of ships leading to a reduction in ships’ capacity and a reduction in container availability, along with a potential for an increase in insurance costs and liability for ship owners and insurers,” Tellah said.

The Red Sea has remained a biggest worry by shippers resulting to the rerouting of vessels to take a longest route via Southern of Africa while some vessels are attempting to mask their positions by pinging on other locations, as a safety precaution when entering the Yemen Coastline.

The announcement comes days after industry associations such as The Baltic and International Maritime Council (BIMCO); one of the largest of the international shipping lobbies representing ship-owners and International Chamber of Shippers (ICS published security guidance applicable to navigating in the Southern Red Sea and Gulf of Aden.

The guidance follows a series of threats from and attacks by the Houthis, a Yemen-based rebel group.

This week, Houthis said they had fired missiles at two British and American civilian ships in the Red Sea in retaliation on the ongoing attacks by the two superpower nations.

The Iran-aligned armed group has stated its determination to continue the attacks despite several air strikes by the US and its allies patrolling the Red Sea.

The United States, United Kingdom and other friendly countries continue launching strikes against multiple Houthi targets in Yemen, after the US warning that the group would bear the consequences of its repeated attacks.

Late January this year, 20 countries launched strikes against Houthis warning the great nations would act again if the militants persist in attacking shipping in the Red Sea.

“In response to continued illegal and reckless Houthi attacks against vessels transiting the Red Sea and surrounding waterways, the armed forces of the United States and United Kingdom, with support from Australia, Bahrain, Canada, the Netherlands, and New Zealand, conducted additional strikes against eight targets in Houthi-controlled areas of Yemen,” a joint statement issued by the British prime minister’s office said.

Kenya has since joined a group of countries opposed to Houthis attacks.

The UK said the strikes were designed to disrupt and degrade the capability of the Houthis to continue their attacks on global trade and innocent mariners from around the world, while avoiding escalation.

The January 22 international response to the continuing Houthi attacks demonstrated shared resolve to uphold navigational rights and freedoms, and to defend the lives of mariners from illegal and unjustifiable attacks.