Mitsui Cashes In as Aging Oil Tanker Values Soar

Mitsui to sell older oil tankers as vessel prices surge

Disruptions caused by conflicts in the Middle East and Ukraine are tightening shipping capacity, driving up fuel, insurance and freight costs across international trade lanes. The changes are affecting ocean carriers, air freight operators and the trucking networks that move cargo after it reaches a port.

The immediate pressure is most visible on routes connected to the Gulf and Red Sea. Security concerns have led shipping companies to avoid some areas and reroute vessels around the Cape of Good Hope. Maersk, CMA CGM and Hapag-Lloyd have confirmed route changes intended to protect crews and cargo.

For drivers and carriers handling port freight, those diversions can create longer waits and less predictable delivery schedules. A voyage around southern Africa can add 10 to 15 days to transit times. Ships remain tied up for longer periods, reducing the number of vessels available to carry cargo and contributing to congestion at ports and inland distribution points.

The disruption is also increasing the cost of moving containers. CMA CGM has applied emergency conflict surcharges of $2,000 per 20-foot container and $3,000 per 40-foot container, with charges of up to $4,000 for special or refrigerated equipment. Hapag-Lloyd has introduced a war-risk surcharge of $1,500 per twenty-foot-equivalent unit.

Those fees are added to normal transportation costs, including fuel, terminal handling, storage and inland trucking. When containers arrive late or vessels are rerouted, truck operators can face missed appointments, extended detention and more difficulty planning equipment and driver hours.

Marine fuel is another major source of pressure. Leandro Barreto, a partner at Solve Shipping, said fuel can account for as much as 40% of a voyage’s expenses. Prices have risen as conflict disrupts production and the movement of energy supplies from the Gulf. Shipping contracts commonly pass fuel fluctuations on to customers, meaning higher vessel operating costs eventually reach shippers and transport providers.

Insurance costs have also increased sharply for voyages through high-risk areas. War-risk coverage has not been eliminated, but policies have been tightened and repriced. Some high-risk transit quotes have reached roughly 7.5% to 10% of a vessel’s hull value, according to the information provided. Those costs further raise the price of moving oil, containers and other cargo through affected waterways.

Ocean freight rates are rising beyond the Middle East as carriers adjust schedules and available capacity becomes tighter. On the Asia-to-Brazil route, the price of moving a 40-foot container reportedly increased from about $1,500 in January to between $7,000 and $8,000 in June.

Seasonal demand is adding to the strain. Shipping activity from Asia typically increases between June and October as retailers build inventories ahead of Black Friday and the Christmas shopping season. Higher demand arriving at the same time as longer voyages and port disruptions can push rates higher on routes that are not directly connected to the conflict.

Some shippers are turning to air freight to cover urgent shortages, but that option remains limited and expensive. Air freight typically costs five to 10 times more than ocean transport, and prices are climbing as aircraft capacity tightens. Airspace closures have forced some airlines to take longer routes, reducing available cargo space on freighters and passenger aircraft.

Dubai and Doha, normally major air cargo hubs, have also seen operations severely limited by the regional conflict. Steve Blough, chief supply chain strategist at logistics software firm Infios, said many companies are moving only limited quantities by air to bridge supply gaps rather than replacing ocean transport entirely.

The result is a broader logistics squeeze. Cargo may spend more time at sea, face higher charges at the port and then require faster or more carefully coordinated inland transportation. Trucking companies serving importers and exporters may see changes in appointment times, chassis demand, warehouse schedules and fuel surcharges as ocean carriers revise their networks.

The market conditions are also influencing decisions by vessel owners. With ship prices elevated, selling older oil tankers can provide owners with an opportunity to realize higher values while reducing exposure to rising maintenance, fuel and insurance expenses. The available information identifies Mitsui as moving to sell older tankers, but does not provide details on the vessels, sale prices or timing.

For professional drivers, the main effects are likely to be felt through continued uncertainty at ports and distribution centers. Longer transit times, conflict-related surcharges, rerouting and higher fuel costs can all affect when freight becomes available for pickup. Until routes and cargo flows stabilize, shippers and carriers will have to manage with less predictable schedules and higher costs across the supply chain.