The Houthi attacks on shipping in the Red Sea have entered their third year, and what started as a security crisis has settled into a structural change in global trade. Major container lines continue to route vessels around the Cape of Good Hope rather than the Suez Canal. Premium rates on Asia-Europe routes are 40 to 80% higher than 2023 levels. Transit times have lengthened by 10 to 14 days for many SA-bound cargoes. For South African importers, exporters, and the marine insurance market that supports them, the Red Sea crisis is not a temporary disruption, it is the new operating reality.
For SA cargo owners, the question in June 2026 is no longer “when will Red Sea routing normalise?” It is “how should we structure marine insurance, supply chain financing, and customer commitments around a permanent Cape route?” The marine insurance market has answers, but they require active broker engagement to access. All cover discussed here is subject to underwriting and final policy wording.
TL;DR
- Red Sea routing around the Cape of Good Hope has become the default for Asia-Europe shipping. SA ports are seeing more traffic, longer cargo dwell times, and higher accumulation risk.
- Marine cargo premiums on Asia-Europe routes have risen materially since 2023, with the largest rate movements on trades that historically transited the Suez Canal. Marsh’s Q1 2026 Global Insurance Market Index confirms marine hardening on affected routes, though the effect has been principally confined to risks in or connected to the affected region. War risk premiums on Red Sea-transit cargo can spike significantly during specific attack events.
- SA importers are facing extended stock-in-transit values because cargo is in transit longer. Marine sums insured and cover durations need recalibration.
- The Cape of Good Hope route is exposing SA cargo to weather (cyclones, swells), piracy spillover in the West African Gulf, and bunkering disruption that the Suez route did not present.
- Stock throughput policies (STP) are becoming more attractive than transit-only cover because they smooth the cost of longer dwell times at warehouses and ports.
Table of Contents
What has actually changed since 2024
The Houthi campaign against Red Sea shipping began in late 2023 and escalated through 2024. By early 2025, major container lines including Maersk, MSC, CMA CGM, and Hapag-Lloyd had largely abandoned the Suez route for Asia-Europe traffic. The diversion around the Cape adds approximately 3,500 nautical miles and 10 to 14 additional sailing days per voyage, with a substantial increase in fuel consumption per trip. Smaller carriers and tankers have been more variable, with some continuing through the Red Sea on a higher-risk basis and others routing south.
By mid-2026, what started as a temporary diversion has become the default. Insurance markets have repriced. Shipping schedules have been rebuilt. Supply chain financing structures have adapted. The Red Sea is technically still navigable for cargo willing to pay 5 to 15 times the standard war risk premium, but the volume of cargo making that choice has stayed depressed.
For SA, the implications are double-sided. The Cape route runs directly past South African ports, which has driven more vessel traffic to bunker, take on stores, and occasionally call at Cape Town and Durban. The flip side is that SA-bound cargo from Asia now takes significantly longer to arrive, and SA exports to Europe and the Mediterranean go via a route that adds days and costs.
How the Red Sea crisis hits SA cargo owners specifically
SA importers, exporters, and businesses with hosted-supply-chain dependencies feel the Red Sea effect through several specific channels:
Longer transit times for imports
An Asia-to-Durban shipment that took 21 days in 2023 now takes 31 to 35 days. For inventory-sensitive businesses (retail, electronics, fashion, auto parts), the extra 10-14 days has meant higher stock-in-transit values, more working capital tied up, and recalibrated reorder points. Marine cargo sums insured need to reflect these higher in-transit values; many SA businesses are still insuring at 2023 stock levels.
Extended exposure window for cargo
Longer voyages mean cargo is at sea for longer, exposed to a wider range of weather and operational risks. The marine insurance trigger remains the same (loss or damage during transit), but the cumulative exposure across the longer voyage is higher. War risk extensions, where required for specific lanes, now apply over a longer period for cover purposes.
Higher accumulation risk at SA ports
With more vessels calling at Cape Town for bunkering and at Durban for transhipment, port congestion has worsened. Cargo dwell times at Durban averaged 6-8 days in 2023; in 2026, dwell times of 10-15 days are common during peak periods. Longer dwell time means higher accumulation values at any single port location at any given moment, a marine accumulation exposure that insurance programmes need to address.
SA exports to Europe via Cape
SA wine, fruit, manufactured exports, and bulk commodity exports to European markets now take the long route home. For temperature-sensitive cargo (wine, fruit, pharmaceuticals), the extended voyage adds refrigeration and spoilage risk. Marine cargo cover should reflect the longer cold chain integrity exposure.
Bunkering cost pass-through
Vessel operators have passed bunker cost increases through to shipping rates. SA importers have faced materially elevated container rates compared to 2023 baselines, and the cost flows into product pricing. This is not directly insurance-related, but it shapes the conversation about insurance value, a higher-cost supply chain makes the insurance against disruption more economically necessary.
Where marine premiums have moved in 2026
The marine insurance market has repriced in stages since 2024. The current state of premiums for SA-relevant lanes:
Marine cargo (peril of the sea, fire, theft): Standard Institute Cargo Clauses (A) wording on SA-Asia and SA-Europe routes has moved above 2023 baseline, reflecting longer voyage exposure via the Cape route, accumulation risk at ports and diverted routing conditions. Individual rate outcomes vary significantly by carrier, commodity type, cargo value, prior claims experience and route mix.
War risk extension on Cape route cargo: The Cape of Good Hope route does not require Joint War Committee-listed area transit, so standard war risk extensions apply at near-2023 rates. Cargo that nonetheless transits or originates near Red Sea waters pays significantly more, often 5 to 15 times standard war risk premium for those specific segments.
Stock throughput policies (STP): STP rates have softened relative to transit-only cover because the longer dwell time and storage exposure that the Red Sea crisis introduced is actually what STP is designed to cover. SA importers and exporters are switching to STP in growing numbers, and competitive STP pricing has helped offset some of the broader marine cost increases.
Hull and machinery for SA-based vessels: SA flagged vessels operating in coastal and West African waters face higher H&M premiums driven by the wider marine market repricing. The Red Sea diversion has pushed up rates indirectly by tightening global marine insurance capacity.
Protection and indemnity (P&I): Member calls at major P&I clubs are up 10 to 18% for 2026, driven by claims experience and the broader hardening of the marine market.
New risks the Cape route exposes
The shift to the Cape of Good Hope route has introduced new risk exposures for SA cargo that the Suez route did not present. Marine programmes structured for 2023-era trade patterns may not address these:
Southern Ocean weather
The Cape route exposes vessels to South Atlantic and Indian Ocean weather systems, including cyclones in the Mozambique Channel and Southern Ocean swells south of the Cape. Cargo on the Cape route is exposed to more severe weather perils than Suez transit. Marine cargo cover should explicitly include cover for these perils, and policy wordings drafted around Mediterranean-and-Suez routing may have gaps.
Cyclone exposure in the Mozambique Channel
Vessels rounding the Cape on the eastern leg may transit the Mozambique Channel during cyclone season (November to April). Cyclone Idai (2019) and Cyclone Freddy (2023) caused significant cargo and infrastructure losses. Cargo cover for vessels transiting these waters should reflect the cyclone exposure. See our analysis of East Africa marine corridor risks for related considerations.
West African Gulf piracy spillover
The West African Gulf, particularly the Gulf of Guinea region off Nigeria, Cameroon, and Equatorial Guinea, has historically been a piracy hotspot. With more vessels routing past the West African coast, there is concern about increased opportunity for piracy incidents. Marine war risk cover for cargo on the Cape-via-West-Africa routing should specifically include cover for piracy and armed robbery at sea.
Port congestion at Cape Town and Durban
The increased vessel traffic at SA ports has lengthened cargo dwell times and created higher accumulation risk. Marine cargo cover should reflect realistic dwell-time exposures, and STP cover is becoming the more appropriate structure for many SA importer-exporter operations.
Bunkering disruption risk
Vessels relying on SA bunkers for the Cape route are exposed to any disruption at SA ports, labour action, infrastructure failure, or operational delays. Marine cover does not respond to delay alone, but extended dwell-time and storage exposures should be addressed.
Cover structures SA shippers should consider
SA cargo owners renewing marine programmes in 2026 should specifically consider the following cover structure changes to address the Red Sea era:
- Extended transit clause duration. Standard transit clauses limit cover to 30 days from vessel discharge. For Cape-routed cargo with longer dwell times and inland transit complexity, extending the transit clause to 60 or 90 days is increasingly the right answer.
- Stock throughput policy (STP) rather than transit-only. STP covers cargo in transit, at storage locations, and at interim points under a single policy. For SA importers holding cargo at SA ports for extended periods, STP often delivers cleaner cover at a lower total premium than transit-only plus separate stock cover. See our deep dive on when STP beats transit-only.
- Increased sums insured. Longer voyages mean higher in-transit values at any given moment. Sums insured should reflect 2026 cargo values, not 2023 baselines.
- War risk extension review. Cargo not transiting Red Sea waters typically does not need the higher-rated war risk premium, but cargo that originates near or transits any listed war area should have specific cover.
- Accumulation cover at SA ports. With more cargo dwelling at ports for longer, accumulation limits should reflect the realistic peak exposure at any single location.
- Delay cover. While marine cover does not respond to delay alone, some marine policies can include delay-related extensions for specific cargo categories where revenue impact from late delivery is severe.
- Coordinated programme. Marine, political risk, and trade credit covers interact. Where Red Sea-related events affect payment or contract performance, separate political risk and trade credit covers may also respond. Coordinating these through a single broker reduces wording gaps.
Why stock throughput is winning over transit-only
The Red Sea era has accelerated a shift that was already underway: SA importers and exporters with significant cargo flow are increasingly choosing stock throughput policies (STP) over transit-only marine cargo cover.
The reasoning is straightforward. Transit-only cover responds to cargo loss or damage during the defined transit. STP responds to cargo loss or damage anywhere in the supply chain, in transit, in storage, at customs, at warehouses, at port, under one wording. For SA businesses where cargo now dwells longer at ports and warehouses because of the Cape routing, STP eliminates the wording risk between transit cover and standalone stock cover.
STP has historically been priced at a premium to transit-only cover for equivalent annual cargo value. In 2026, that gap has narrowed as STP capacity has expanded and as transit-only cover has hardened on affected routes. For SA importers with material annual cargo turnover, STP is worth reviewing against transit-only alongside a broker who can compare total programme cost and cover scope for the specific trade profile.
The structure matters at claim time. Under transit-only cover, a fire at a port warehouse during a 14-day dwell may fall into a coverage grey area, neither in transit nor in agreed storage. Under STP, the same loss is clearly covered. Where SA businesses have actual claims, the premium difference often pays itself back many times over.
Marine renewal checklist for SA businesses in 2026
For SA importers, exporters, and businesses with marine cover renewing in 2026, the following items deserve specific attention in the renewal conversation:
- Update cargo values to current 2026 replacement costs (typically materially higher than 2023 baselines)
- Review transit clause durations against actual port dwell times in 2026
- Compare transit-only versus stock throughput cover for material annual cargo turnover
- Confirm war risk extension applies to actual cargo lanes (not generic worldwide)
- Review accumulation limits at SA ports for realistic peak exposure
- Address cyclone exposure for cargo transiting the Mozambique Channel
- Review piracy and armed robbery cover for any West African Gulf transit
- Coordinate marine with political risk and trade credit covers where applicable
- Document the longer voyage exposure for claims-handling clarity
An independent marine insurance review can map the actual exposure profile against current cover and identify the specific items that need adjustment at renewal. For SA businesses based in or routing cargo through Cape Town, the Cape Town marine insurance team at Berkley Risk has specific expertise in Cape-route exposures.
Frequently asked questions
Has the Red Sea crisis ended in 2026?
No. The Houthi campaign against Red Sea shipping has entered its third year and shows no signs of imminent resolution. Major container lines continue to route around the Cape of Good Hope. Insurance markets have priced the Cape route as the operating baseline rather than a temporary disruption.
How much more does it cost to ship cargo via the Cape route?
Vessel operators are paying significantly more in fuel for the longer voyage and have passed through elevated container rates to shippers. Marine insurance cargo premiums on Asia-Europe routes have risen materially since 2023. The cumulative effect on landed cost depends on the cargo and route, but most SA importers are seeing meaningful supply chain cost increases.
Do I need war risk insurance for cargo on the Cape route?
Cargo routing entirely via the Cape of Good Hope, avoiding Red Sea and Joint War Committee-listed waters, can be covered under standard war risk extensions at near-2023 rates. Cargo that nonetheless transits or originates near Red Sea, Persian Gulf, or other listed war areas should have specific high-rated war risk cover for those segments. A broker review identifies the right cover for your specific lanes.
Why are stock throughput policies more attractive in 2026?
The longer dwell times at SA ports created by Cape routing mean cargo is in storage longer than under Suez routing. Stock throughput cover responds to losses anywhere in the supply chain (transit, storage, interim points) under one wording, eliminating the wording gaps that transit-only cover can leave. STP has also become more competitively priced as capacity has expanded, making it a stronger value proposition than in earlier years.
Are SA ports busier because of the Red Sea diversion?
Yes. Cape Town and Durban are seeing more vessel traffic from bunkering and transhipment activity. The downside is congestion and longer cargo dwell times, which have implications for accumulation risk and warehouse exposure. The upside is that some SA ports have benefited from the increased traffic and associated economic activity.
What should SA exporters know about the Cape route to Europe?
SA exporters of wine, fruit, automotive components, and manufactured goods to Europe face a 10-14 day longer voyage that adds exposure for temperature-sensitive cargo. Refrigeration breakdown cover, transit clause duration, and warehouse cover at European destinations should all be reviewed against the extended supply chain timeline.
Will the Red Sea route reopen?
Possibly, but no realistic timeline exists. Most marine insurance markets are operating on the assumption that the Cape route will remain the default for Asia-Europe traffic for at least the next 18-24 months, and that even if the Red Sea reopens, the migration back to Suez will be gradual rather than instant. Marine programmes should be structured for the Cape baseline, not a hoped-for return to pre-2024 routing.
Review your marine programme against the 2026 reality
The Red Sea crisis is no longer a temporary disruption. For SA cargo owners, it is the operating reality of global shipping. Marine programmes structured for 2023-era trade patterns are likely under-insured, under-scoped, or carrying wording gaps that the Cape route will eventually expose. A focused renewal review can address the gaps before they become claim disputes. Contact Berkley Risk or call 011-702-8250 to arrange a marine programme review structured around current Cape-route exposures, subject to underwriting and insurer appetite.
Berkley Risk (Pty) Ltd arranges/places/co-ordinates insurance with licensed insurers. FSP #54407. This article is general information only and does not constitute legal, financial, or regulatory advice. All cover is subject to underwriting acceptance and final policy wording.
This article is general information only and does not constitute financial product advice. Rate movements, cover options and case scenarios described are general market observations. Cover requirements and structuring for your specific business should be discussed with a licensed FSP. Berkley Risk is an authorised financial services provider. FSP #54407.
