Cover Story
Rolling disruption
Red Sea diversions end container capacity relief for ro / ro carriers : Grimaldi
By Peter Shaw-Smith
DUBAI — The joint managing director of the Grimaldi Group says it ’ s no longer feasible for the vehicle carrier to move cargo into containers due to roll-on / roll-off ( ro / ro ) capacity restraints now that Red Sea disruptions have sent Asia – Europe spot rates surging .
The loss of the capacity lever for ro / ro carriers compounds the challenge for vehicle carriers as much of the ro / ro fleet is being diverted from the Red Sea to sail around southern Africa to avoid Houthi militant attacks . The Houthis seized the ro / ro vessel Galaxy Leader in mid-November , and several other vehicle transporters have been threatened with missile strikes .
“ Three of my ships transited [ the Suez Canal ] in the last two weeks , under escort from the Italian navy ,” Emanuele Grimaldi told the Journal of Commerce on the sidelines of the ShipTek 2024 conference Jan . 24 . “ Some chartered vessels have decided they didn ’ t want to take the Red Sea route , probably because their navies are not stationed [ there ].”
Grimaldi blasted what he called a lack of global leadership to restore security in the Red Sea . “ This is a huge risk , and we have to remember that peace is a prerequisite for world prosperity ,” he said .
Order book considerations
While container spot rates aren ’ t favorable for vehicle shipment now , Grimaldi said the size of the container ship order
“ We have to remember that peace is a prerequisite for world prosperity .”
book could easily pull rates down as networks adjust to Red Sea disruptions . The share of container capacity on order versus capacity on the water was 26 % as of December , according to S & P Global , parent company of the Journal of Commerce . In 2022 , the share of ordered capacity to existing capacity hit a 12-year high of 27 %.
Last year , the global car carrier fleet totaled about 760 ships , with 77 vessels on order . Of those , about 70 were due for delivery in 2024 , British shipbroking house Clarksons said in a report in late September .
“ If rates remain very low , it is possible that we will want to ship cars in containers ,” Grimaldi said .
Ro / ro carriers have newbuilding vessels on order equal to about 30 % of the present fleet , with vessel deliveries scheduled to begin in 2024 , but they ’ ll primarily offset retired tonnage rather than expand fleet capacity , according to the Clarksons report .
Grimaldi said the order book of the group ’ s key North Europe and Mediterranean unit stands at 23 vessels .
“ All have an improvement of at least 50 % in emissions because they can do much better than their predecessor vessels ,” he said . “ Some of these vessels will also be ammonia-ready .”
email : petershawsmith @ gmail . com
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14 Journal of Commerce | February 12 , 2024 www . joc . com