More ships back in Red Sea but full recovery not on horizon: AD Ports Group

More shipping operators have returned to the Red Sea but a full-scale recovery at the Suez Canal is "not yet on the horizon," AD Ports Group said Nov. 12.

Disruptions since December 2023 as more ships avoided the Red Sea because of attacks by Iran-backed Houthi militants are likely to persist in the "short-term," the company said in an earnings statement. It noted that shipping companies Maersk, Hapag-Lloyd and Cosco will continue to sail around the Cape of Good Hope, instead of through the Red Sea, until the end of 2024 and into 2025.

Yemen-based Houthi militants have attacked nearly 130 merchant ships in the Red Sea and Gulf of Aden since December 2023 as of Nov. 7. IMF PortWatch data showed the average daily ship transits via the Bab al-Mandab Strait stood at 22 in the week ended Oct. 30, down from 78 in the same week a year earlier.

AD Ports' flagship Khalifa Port in Abu Dhabi recorded a 22% year-over-year jump in container volumes in the third quarter and its roll-on/roll-off volume for vehicle shipments jumped 53% over the same period, supported by the Red Sea crisis. The total ro-ro volume rose 2% on the year to 384,000 units in Q3, while the number of cruise passengers served dropped 98% to zero, it said.

The cruise season in Abu Dhabi runs from November to April, leaving no traffic in July, August and September, and the cruise terminal at Aqaba, Jordan, shut in December because of the Red Sea disruptions, an AD Ports spokesperson said.

Container volumes jumped 24% on the year to 1.7 million 20-foot equivalent units while cargo volumes climbed 26% to 13.6 million mt, AD Ports said in the statement.

Shipping rates, which softened in September and October, could continue their recent rebound as Donald Trump's election as the next US president will likely lead to US tariff increases, triggering cargo front-loading, the company said.

The Platts Container Index was at $3,812/FEU on Nov. 11, up from a recent low of $1,867.13/FEU on Sept. 30, according to S&P Global Commodity Insights data.

AD Ports expects capital expenditures to reach Dirham 4.5 billion ($1.23 billion) this year, with Dirham 3.26 billion spent through the end of September, down 11% from the same nine months in 2023.

Total Q3 revenue reached a record Dirham 4.66 billion, up 10% on the year, with the ports division up 24% over the same period, maritime and shipping up 96%, economic cities and free zones up 16%, logistics up 48% and digital up 62%, it said.