Red Sea shipping rerouted, whether South Africa can seize the 'unexpected business opportunities'
In recent months, due to the volatile situation in the Red Sea, Yemen's Houthi forces have continued to attack passing ships, forcing many shipping companies to reroute their vessels around the Cape of Good Hope in Africa, which has brought South Africa an 'unexpected business opportunity'. However, due to the relevant port has long been insufficient capacity, inefficiency and other issues, South Africa can seize this opportunity is still doubtful. From the current point of view, if South Africa wants to seize the economic development opportunities brought about by the rerouting of Red Sea shipping, it is urgent to upgrade the port and improve the operational level.
Since the outbreak of a new round of Israeli-Palestinian conflict in October 2023, the Red Sea waterway and the Suez Canal together constitute the 'Eurasian waterway' has become uneasy. Yemen's Houthis have repeatedly attacked 'Israeli-linked' targets in the Red Sea waters on the pretext of 'supporting Palestine'. In order to avoid the Red Sea waters, many international shipping companies have announced the suspension of the Red Sea route, and instead detoured to the Cape of Good Hope at the southern tip of Africa.
Beginning in December 2023, a number of shipping giants, including Mediterranean Shipping Company, Duffy Shipping Group, Maersk Line Group, and Hapag-Lloyd, suspended their container ships in the Red Sea and its contiguous waters.
Entering 2024, the situation in the Red Sea has not improved, but rather a long-term momentum. Maersk Line Group recently said it will continue to avoid Red Sea routes for the foreseeable future, bypassing the southern tip of Africa. In the red sea shipping rerouting background, there is a country to become the biggest beneficiary, that is South Africa.
The Cape of Good Hope route, also known as the African route, before the Suez Canal was cut through, it was the only sea passage from Europe to Southeast Asia and East Asia. Even now, can not pass through the Suez Canal more than 250,000 tons of giant ships still need to pass through the Cape of Good Hope.
South Africa's maritime chamber of commerce executive chairman Unasi Songti told reporters, rerouted through the cape of good hope of the ship there is fuel, supply and even maintenance needs. South Africa currently does not provide marine refueling services, meaning that these ships are likely to need to stop at ports along the route.
In addition, originally via the Suez Canal cruise ships bypassing the Cape of Good Hope, will also benefit the South African tourism industry. In mid-April this year, for the first time in history, two of the world's most famous large luxury cruise ships - Crown Cruise Line's 'Queen Mary 2' and 'Queen Victoria' cruise ship The cruise ships 'Queen Mary 2' and 'Queen Victoria' of Crown Cruise Line docked at the same time in the port of Cape Town, South Africa, which brought a large number of tourists and also triggered local people to watch.
South Africa's Western Cape province's Department of Tourism, Trade and Investment Promotion said the cruise industry has become an important contributor to the province's economy, bringing in 1.2 billion rand (about $63 million) in revenue for the 2022-2023 fiscal year cruise season (November 2022 to May 2023) alone. Each cruise ship arrival translates into tangible economic benefits as one full-time job is created for every 30 arriving cruise passengers. The current FY2023 to FY2024 cruise season has confirmed 65 cruise ship arrivals, which are estimated to bring approximately 90,000 passengers and 38,000 crew members.
Western Cape Minister of Finance and Economic Development Mireille Wenger said the significant increase in cruise ship visits was 'good news because more tourists mean more jobs for the Western Cape'.
Arguably, the Red Sea crisis, which has forced shipping to reroute to the Cape of Good Hope, will bring huge economic benefits to South Africa.
Concerned about maritime issues in South Africa Stellenbosch University of Business and Public Law Associate Professor Michelle Nel told reporters that every year, 12% of global trade and 30% of global container traffic through the Red Sea, in the above shipping rerouted around the southern tip of Africa, South Africa because of its advantageous geographical location can obtain many economic benefits, such as transit fees, etc., and more ships docking supply means more port service demand This will stimulate the local economy and potentially create a lot of jobs in the port and neighboring areas. She believes that now is the ideal opportunity for South Africa to establish itself as a full-service maritime hub for all trade routes passing through the country.
South Africa's domestic media also quoted a number of experts pointed out that, with more ships around the Cape of Good Hope, in the world's shipping map, the status of 'declining' South Africa can be said to usher in a 'great opportunity', the opportunity to re-emerge as an important global shipping hub. At the same time, South Africa will also get a lot of re-export trade opportunities. It can be said that the increase in the number of ships to and from the South African economy in recent years has been in the downward channel will be a 'shot in the arm'.
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