NEWS

>> The Qatar crisis: impact on container shipping services.more.

>> Maritime Professional Services Award.more.

>> Invest in rail freight to cut road congestion.more.

>> South Bradford Lorry Parking Study.more.

>> New Mega Alliances.more.

>> Businesses have their say on freight transport in the Marches.more.

>> Free trade zones at UK ports & airports.more.

>> Non alliance shipping lines.more.

>> New mega alliances.more.

>> Transpacific - port coverage from April 1st.more.

>> Are direct services becoming less attractive for shipping lines?. more.

>> What happens to the small ships post Panama Canal expansion?. more.

>> Maersk to acquire Hamburg-Sud and reinforce its presence on the Latin America routes. more.

>>£0.5 trillion of trade passes through UK ports. More.

>> The future of rail freight and private investment. More.

>> The Northern Freight and Logistics report. More. 

>> Oxford Cambridge Expressway Study. More.

>> The potential impact of Brexit on trade. More.

>> India - the impact of shipping lines’ consolidation and the cabotage rule change. More.

>> Iran – changes in maritime services post-sanctions. more.

>> 'India: The only way is up' say MDST in an article published by Lloyds List. More.

>> Hanjin’s collapse - A wake-up call to the industry? More.

>> Peak season 2016: could the seemingly more rational shipping lines restore stability to the market?. More.

Search Our Website

The Qatar crisis: impact on container shipping services

The severing of its diplomatic ties, mainly with Saudi Arabia, United Arab Emirates, Bahrain and Egypt, has resulted in Qatar losing airspace, land and maritime connections with its neighbours, and reports of its citizens stockpiling supermarket products in preparation for a likely deterioration in this crisis.

The Qatar blockade, put in place to isolate Qatar for allegedly supporting terrorism, comes less than six months from the point when commercial shipping services shifted their operations from Doha to the recently opened Hamad Port, which will eventually have a handling capacity of 7m TEU.

At this stage, it is premature to assess with certainty the medium and long-term impacts that this crisis (already considered the worst crisis in the Gulf area since Iraq invaded Kuwait) could have on maritime shipping services. However, we can describe how container shipping lines have adjusted their services since the blockade started on June 5th.

Once Hamad had the facilities to handle larger vessels, in February 2017 MSC became the first shipping line to start direct deepsea container shipping services to the Port with its realigned “New Falcon” service connecting the Arabian Gulf with the Indian Sub-Continent and the Far East. In April 2017 the Ocean Alliance (APL/CMA-CGM, COSCO, Evergreen, OOCL) added Hamad port to its service ‘CIMEX3/MEX/MEX3’, linking the Arabian Gulf to the Far East.

The following table shows the two deepsea container services calling at Qatar as scheduled by the shipping lines at the beginning of June, i.e. before the crisis began.

Table 1: Deepsea container services calling at Qatar, June 2017

Service

Number of vessels

Annual Frequency

Average vessel size (TEU)

Annual deployed capacity (TEU)

Regions served

MSC - NEW FALCON

6

52

7,938

412,793

Gulf & ISC - Far East

OCEAN ALLIANCE - CIMEX3/MEX/MEX3

7

52

10,585

550,394

Gulf & ISC - Far East

Source: MDS Transmodal Containership Databank, June 2017

When the sanctions against Qatar began in June, MSC removed the Hamad call from its deepsea service which included calls at Saudi and UAE ports, and has, instead, initiated a weekly feeder from Salalah to Hamad port.  Hamad has also been removed from the itinerary of the Ocean Alliance service and all members have announced they will not be serving the country. It is unknown at this stage if and when there will be a contingency plan for these operators.

Chartering a panamax container vessel, Maersk has begun a feeder once every 10 days from Hamad to its own APM terminal in Salalah to connect with its mainline services. Milaha has recently announced a realignment of their ‘DMJ’ feeder service with Sohar, Oman replacing Jebel Ali.

The following table shows the revised container services calling at Qatar as scheduled by the shipping lines at after the Qatar crisis began.

Table 2: New container services calling at Qatar, July 2017

Service

Number of vessels

Annual Frequency

Average vessel size (TEU)

Annual deployed capacity (TEU)

Regions served

MAERSK LINE - DOHA FEEDER

1

36

4,250

153,000

Gulf & ISC

MILAHA - DMJ

4

260

1,294

336,375

Gulf & ISC

MSC - MID EAST LP1

1

52

1,740

90,480

Gulf & ISC

Source: MDS Transmodal Containership Databank, July 2017

The diplomatic stand-off has resulted in extensive cooperation between Qatar and Iran with food being flown and shipped in from the latter. With IRISL’s container division HDS Lines operating Far East-Arabian Gulf strings, there could be potential for it to fill the void left by the deepsea services of the Ocean Alliance. Additionally, Ocean Alliance member CMA-CGM slots on two HDS Lines services and Evergreen serves the main Iranian port of Bandar Abbas on its ‘APG’ service.

In the shortsea market the Qatari carrier Milaha Maritime, the major line operating high frequency feeders between Hamad and the UAE with some 50% of its containership fleet Qatari flagged, will likely be the main company to suffer the consequences of the economic sanctions.

As recently as February 2017, the Qatari line had launched a service between Saudi Arabian ports of Dammam and Jubail; this is unlikely to continue with the deterioration of relations.

Other intra-regional services are operated by APL, OEL and X-Press Feeders. No official announcements have been made by these lines about contingency plans at the time of this analysis.  It is however likely that the Qatari ports of Hamad and Umm Qasr will be removed from the schedules as all other ports in the rotations are in Bahrain, Saudi Arabia and the UAE.

Shipping lines will have also to review their bunkering sources, with the UAE, for instance banning any Qatari-flagged vessels entering its large bunkering facilities at the Port of Fujairah. The impact will be strongly felt by feeder operators.

The crisis affecting Qatar is yet another example of how the geopolitical instability is testing the container shipping industry. With the risk of Iran facing new sanctions, shipping lines are forced to act quickly and revisit promptly their schedules. Not surprisingly, the first contingency plans have been put in place by the major shipping lines/ alliances proving once more their capability to respond immediately to the challenges. Disruptions, however, are inevitable and the industry overall is challenged once again to seek to minimise their impacts on the supply chains.