More ships are rounding the Cape, but ports, policy and strategy are not yet built to turn the surge into lasting gain.

Rerouting around the Cape of Good Hope does not always translate into economic gain, as South Africa’s experience since October 2023 shows. The country has seen differentiated and often unintended effects across commercial, security, environmental and policy domains.

This reflects a broader tension in its positioning between short-term economic gain and long-term structural transformation, complicated by the absence of a national maritime security strategy. A recent Institute for Security Studies-hosted closed roundtable highlighted these tensions and challenged prevailing assumptions.

The first misconception is that diverted vessel traffic automatically boosts port revenue. Several major shipping lines have rerouted around the Cape since late 2023, driven by disruptions at Middle Eastern chokepoints.

Houthi attacks made transiting the Bab-el-Mandeb Strait increasingly hazardous from 2023 to 2025. The Iran war has since extended disruptions to the Strait of Hormuz. Cape-bound diversions have more than doubled from pre-crisis baselines.

The assumption is that increased vessel traffic results in more port calls and higher revenue from services such as berthing fees, cargo handling, bunkering (fuel supply), and repairs and maintenance. But data shows no obvious surge in vessel arrivals into South Africa’s main ports of Durban and Cape Town. Almost all diverted vessels travelling around the country are transiting rather than stopping to use its maritime services.

Increased traffic also expands the operating space for illicit activities, creating economic and security risks. Non-state actors such as search and rescue organisations are increasingly exposed to criminal dynamics at sea. As vessel numbers rise and routing patterns change, the surveillance and monitoring burdens grow, and scrutiny of shipping becomes more complex.

At the same time, information-sharing gaps on nefarious activities persist. Diplomats at the roundtable said uncertainty over how to channel actionable intelligence on maritime crime remained problematic.

Compounding these challenges is the growing presence of uninsured or under-insured vessels transiting the route. In South Africa’s hazardous waters, such vessels externalise substantial financial and legal risks onto the affected coastal state when accidents occur.

Without insurance, one participant noted, the financial burden ultimately falls on the state. The grounding of the Nigerian tugboat LEO around 18 nautical miles off South Africa’s shoreline cost lives and exposed the vulnerabilities involved. A major pollution incident along the ecologically sensitive Southern African coastline would carry severe environmental consequences, alongside unresolved questions of insurance, reputation and regulations.

A second prevailing assumption is that South African ports are poorly positioned to fully benefit from this increased traffic. While they do perform poorly across various measures, Cape Town’s port has shown signs of improvement since 2024. Even so, shipping lines select routes and port calls that minimise deviation, delay and cost.

Shifting shipping patterns and vessel specifications do not always align with existing port infrastructure, complicating debates over access and capacity. As shipping companies adapt their operating models to improve efficiency and cut costs, ports can’t always keep pace. ‘Port inefficiency’ is sometimes merely a mismatch between the speed of transformation in global shipping and relatively rigid port infrastructure.

Recent reporting indicates that bunkering demand along Africa’s coast has surged due to rerouting. Yet South Africa appears to capture few of these short-term gains, as alternative hubs such as Namibia’s Walvis Bay and Mauritius's Port Louis expand bunkering capacity and operations. These ports offer more predictable turnaround times and fewer regulatory and operational disruptions than South Africa.

But both readings of increased traffic discussed at the roundtable risk overlooking a more consequential shift. South Africa may be positioning itself less for immediate gains and more for participation in a future decarbonised maritime economy.

In so doing, it must reconcile several agendas that do not neatly fit together. These include the ambition to become an international maritime centre catering for the projected global maritime economy characterised by a future shipping system that has undergone a structural transition to low- or zero-carbon fuels and technologies.

And it aims to do so while including a heavy developmental mandate framed around job creation in a country where unemployment is above 30%.

South Africa is building a policy and investment environment oriented towards a longer-term transition and commercial participation in a decarbonised and global maritime economy, particularly green shipping fuel production like hydrogen and ammonia. The Transport Department’s 2025-2030 Strategic Plan notes that it has tabled a Maritime Decarbonisation Roadmap.

However, achieving decarbonisation is especially difficult because South Africa’s ocean-economy agenda has historically included carbon-intensive non-renewable activities, including offshore oil and gas. Continued reliance on these sits in growing tension with emerging markets and regulations.

Indeed, the Richards Bay Coal Terminal is one of the largest coal terminals worldwide, but global regulatory trends are towards lower emissions, cleaner fuels and stricter compliance.

The potential gain from greener alternatives is clear. The Department of Trade, Industry and Competition’s 2024 Industrial Policy & Strategy Review says successful commercialisation of green hydrogen in South Africa could add as much as R188-billion to GDP, support 387 774 jobs, and generate R29-billion in fiscal revenue by 2030. New infrastructure for future fuels is required to turn ports into green fuel production, bunkering and export nodes.

While the potential gains from green hydrogen are significant, this transition is not without risk. South Africa’s own strategic planning underscores that global decarbonisation pressures could destabilise coal-dependent regions if the shift is rapid or poorly managed. Government has written two ambitions into the same policy space: grow and transform the sector while meeting tightening international environmental standards.

If it moves too aggressively towards costly market-based measures, it risks harming domestic constituencies that already view shipping, ports and the ocean economy as sources of jobs and industrial revival. If it appears too cautious, it risks undercutting its own stated support for International Maritime Organization decarbonisation and its broader just-transition narrative.

Attending to the Cape of Good Hope only in times of crisis reflects a broader undervaluing of the oceans in South Africa’s strategic thinking and a recurring pattern of limited high-level engagement.

Maritime issues must be better anchored at the centre of government through clearer political ownership, supported by an enhanced Maritime Security Advisory Committee that implements a national maritime security strategy and ensures key departments’ consistent participation.

Written by Daniela Marggraff, Research Consultant, ISS and Junior Research Officer, University of Pretoria & Timothy Walker, Senior Researcher, Transnational Threats and Organised Crime, ISS