Report says global disruptions key factor in freight rates surge, dwindling of world’s largest shipbreaking yard

Freight costs increasing due to global disruptions
Freight costs increasing due to global disruptions

Global disruptions, particularly Israel’s genocidal war in Gaza, which has had a knock-on effect on international trade routes, and Yemen’s Houthi rebels’ frequent attacks on commercial vessels in the Red Sea in support of the Palestinians, are a major contributing factor to the increase in freight rates, according to an Al Jazeera report. 

Due to the ensuing security situation, ships are now compelled to travel the lengthier Cape of Good Hope route rather than the Suez Canal, which is driving up freight costs and delaying cargo globally.

These problems were also mentioned as one of the causes of the decrease in employment prospects at Alang, the largest shipbreaking yard in the world, which is situated in Gujarat’s Bhavnagar district.

Similarly, an investigation carried out in June 2022 by the United Nations Conference on Trade and Development revealed that the conflict between Russia and Ukraine, as well as other conflicts in the Middle East, had increased the cost of marine fuel by over 60 percent, resulting in increased operational costs and shipping delays.

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India’s Alang a prime site for ship breakage

In the 1980s, Alang’s distinctive tidal pattern and gently sloping beach made it the hub of India’s ship recycling sector, allowing ships to be beached and disassembled at a low cost, but fewer ships have arrived on the shore of Alang over the past decade.

Beaching is the process of driving ships ashore during high tide. After being grounded, hundreds of workers disassemble them piece by piece, saving machinery, pipelines and steel. 

Almost everything is resold for use by the industrial and construction sectors, including cables and cabinets.

Over 8,600 ships totalling about 68 million tonnes of light displacement tonnage, or the actual weight of a ship without fuel, crew and cargo, have been disassembled here over the years, making up almost 98 percent of India’s total and roughly a third of the world’s ship recycling volume. 

It is with good reason that Alang is known as a ships’ graveyard.

With a record of 415 ships disassembled, 2011–12 was Alang’s busiest fiscal year since it started operations in 1983, according to figures from India’s Ship Recycling Industries Association. 

Since then, the yard has seen a sharp drop; only approximately 20 of the 153 plots built along the 10-kilometre (6-mile) shoreline are still operational, and even those are only running at a quarter of their full capacity.

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By KC Maderia

A graduate with a Bachelor of Arts in Journalism from the Polytechnic University of the Philippines, KC Maderia is working to establish herself in the media industry.

In her personal time, she enjoys watching sitcoms, diving into thrilling novels, and unwinding by the beach. She also shares her home with her dog, Phyllys.

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