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Charterers force boats to cross the Red Sea? Dry bulk shipowners are in a hurry!
Feb 01, 2024|
View:144Dry bulk shipowners are under increasing pressure in the wake of the Red Sea crisis. Traders of commodities such as iron ore and grains have threatened legal action and tried to change contract terms to force shipowners to use the Suez Canal route, it has emerged.
Michael Bodouroglou, chairman of Greek shipowner Allseas Marine, said some would-be charterers were demanding that a standard "wartime" clause be removed from their contracts, the Financial Times reported.
The provision allows shipowners to divert ships if the most direct route is too dangerous, and the change would allow charterers to force ships to continue sailing through the Suez Canal.
Michael Bodouroglou said: "Some charterers have asked for the wartime clause to be removed from charter contracts to ensure that shipowners do not have the right to divert from the Suez Canal. But so far, it is not clear whether any shipowners have agreed."
"In my decades in the shipping industry, I have never received such a request. Agreeing to remove this clause would be very risky for shipowners. If the conflict escalates into war, all ships will be at greater risk." Michael Bodouroglou added.
One maritime lawyer said charterers often told owners that conditions in the Red Sea were not dangerous enough to warrant the diversion of bulk carriers, even though the Houthis have carried out more than 30 attacks on ships.
The lawyer, who asked not to be named, said charterers were concerned that end customers might refuse to pay for delayed deliveries. At the same time, they have warned shipowners that they may be asked to pay damages for late delivery of cargoes: "Charterers are resisting attempts by shipowners to avoid the Suez Canal." A detour to the Cape of Good Hope may not only incur additional costs, but may also lead traders to find another buyer who may not pay as good a price."
However, John Wobensmith, chief executive of dry bulk owner Genco Shipping, said there had been no feedback from charterers about the diversion of vessels and "some of the smaller charterers may not be as sophisticated."
Genco Shipping is one of the dry bulk shipowners whose vessels have been attacked by the Houthis. On January 18. the company, Genco Picardy, was hit by a drone strike in the Gulf of Aden. The ship had been in the Red Sea area since December when Genco Shipping decided to divert it.
Since the Houthi attacks began in November, many Western shipowners have diverted all ships passing through the Suez Canal to a longer route via the Cape of Good Hope. On January 15. the group expanded its attacks to dry bulk carriers, once again exacerbating the concerns of some dry bulk ship owners about safe passage in the Red Sea.
Data show that from the third week of 2024. the number of dry bulk carriers passing through the Bab el-Mandeb Strait and the Suez Canal has dropped significantly compared to the previous two weeks. In the second week of 2024. the number of dry bulk carriers passing through the Bab el-Mandeb Strait was 139. and the number of dry bulk carriers passing through the Suez Canal was 134. while in the fourth week these figures fell to 104 and 98. respectively.
Data from another shipping research firm shows a similar trend. According to Clarkson data, the average daily arrivals of dry bulk carriers near the Red Sea in the week ending Jan. 28 were 45% lower than in early December.
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