ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) announced today that it is implementing temporary proactive measures to ensure the safety of its crews, vessels, and customers' cargo by rerouting some of its vessels due to the threat to safe transit of global trade in the Arabian and Red Seas,
The Israeli shipping line says that as a result of these measures, longer transit times in the relevant ZIM services are anticipated, though every effort is being made to minimize disruptions. ZIM reaffirmed its, "Continued commitment to serve the East Mediterranean and Israeli ports. Operations to and from these ports will be maintained with the highest regard for safety protocols which are essential to safeguarding the interests of all stakeholders."
"Globes" has been told that ZIM's decision was taken following intensive consultation by the shipping company's management with senior Israeli defense officials following recent attacks in the Red Sea and Arabian Sea of Israeli-owned vessels by Iranian-backed groups.
ZIM did not disclose details about the "longer transit times," but other international shipping lines have said that the longer route could add 18 days to sailings. The significance of this is that rerouting vehicles being shipped to Israel by ZIM from China, Japan and Korea it will double the journey time to Israel from East Asia.
Sources in the car industry estimate that 8,000-12,000 vehicles were scheduled to reach Israel in December from East Asia, most of them electric cars. Most of these cars are being shipped by ZIM and NYK. Japanese shipping company NYK, which already had a ship hijacked off the coast of Yemen which it leases from an Israeli owner, has already sent back ships sailing towards the region.
The international shipping media reports that the ZIM Europe container ship, which was meant to sail eastwards via the Suez Canal, has already rerouted to round the Cape of Good Hope off South Africa , adding thousands of kilometers to its journey.
Sources in the shipping industry say that the rerouting will significantly add to shipping costs and there will also be a sharp rise in the "war premium" charged by insurance companies. All this will add hundreds of dollars to the prices of cars imported from East Asia in the first quarter of 2024.
Published by Globes, Israel business news - en.globes.co.il - on November 28, 2023.
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