While shippers face delays in sending cargo to Europe and vice-versa due to the Houthi Red Sea crisis, Israeli logistics start-up Trucknet has a solution — move cargo by road between Dubai and the Adani-run Haifa port in Israel. Cargo will move through Saudi Arabia and Jordan to reach Haifa port and proceed to Europe by sea.
Though the start-up cannot match the high volume that’s moved by sea, it has a solution to move urgent goods such as medicines, said sources. This means cargo from Mumbai or Mundra can be sent to Jebel Ali, from where it could be sent by road to Haifa, and then via ships to reach ports in Europe or the US.
The company recently entered into a land bridge agreement with UAE-based counterpart Puretrans FZCO and DP World of Dubai. The transit time will reduce by 80 per cent, compared to maritime routes, according to information in the public domain.
Shipping costs rise
Global trade, which is heavily dependent on container shipping, is in troubled waters due to the fallout of the recent attacks by Yemen-backed Houthi militants on ships passing through the Red Sea/Gulf of Aden. After the attacks, container ships are now being diverted via the Cape of Good Hope at the southern tip of Africa, resulting in a sharp rise in both transit time and freight cost.
The circuitous route will add nearly 6,000 nautical miles to a typical voyage from Asia to Europe and double the travel time to more than a fortnight. As ships spend more time sailing, their turnaround time is curtailed, and more of them are needed to be put into service.
Jon Monroe, a shipping expert based in the US, says: “I think the concept is very creative. However, it is not clear what the source of cargo will be. Will containers be offloaded in Dubai, or is this simply a land route for more localised sources?”
Ocean carriers will need to sign off on this if they are thinking of containers by passing the Red Sea. This still does not solve the issue that the Red Sea needs to be an open channel for free trade. Something will need to be done about the Houthis and, this route, if workable, will not solve the bigger problem of 50+ ships per day needs to get to Europe from Asia.
“I do not believe this can significantly impact the trade. Think about it, most vessels plying the Asia to Europe trade carry approximately 8,000 to 10,000 containers. At best, this is a route for urgent shipments much as airfreight is,” he told businessline.