The shelling threatens to stop the movement of container ships in the Red Sea

Amid indiscriminate Houthi attacks on merchant ships in the Bab el-Mandeb Strait, four major container lines, including world leader Maersk, have suspended traffic through the Red Sea. This means routes will be rerouted to bypass the Suez Canal via the Cape of Good Hope, lengthening the journey by about ten days. How long it takes for the situation to stabilize will determine the damage it will cause to global maritime trade: the week-long blockage of the Suez Canal by the container ship Ever Given in 2021 cost the world $10 billion.

Four of the world’s five largest container lines, which account for 54% of all container capacity, according to Alphaliner, have announced the suspension of traffic through the Suez Canal. So far, of the five largest lines, only the Chinese COSCO has not made such a statement, which, in particular, has owned a share in a large terminal in Jeddah on the Red Sea since 2021.

On December 16, the French CMA CGM announced the suspension of the movement of its vessels through the Red Sea for an indefinite period. “In recent days, we have taken enhanced preventative measures to ensure the safety of our ships operating in these waters and their crews,” the company said. “The situation is deteriorating and security concerns are growing. We have therefore decided, immediately and until further notice, to direct all CMA CGM container ships in the region that are due to pass through the Red Sea to proceed to safe zones.” CMA CGM has 80-90 vessels permanently stationed in the Red Sea region, Le Marin reports.

On the same day, MSC announced the suspension of traffic through the Suez Canal, saying that a number of services would be redirected around the Cape of Good Hope. A day earlier, Maersk announced that it would halt traffic through the Bab el-Mandeb Strait indefinitely. Hapag-Lloyd also announced the suspension of traffic until at least December 18.

The container lines’ decisions are related to shelling of ships in the Bab al-Mandeb Strait and the Gulf of Aden by Houthi-controlled Yemen. On December 14, the Houthis fired a missile at the container ship Maersk Gibraltar, which was en route from Salalah (Oman) to Jeddah (Saudi Arabia). There was no hit and the crew was not injured.

On December 15, a shell of unknown origin hit the Hapag-Lloyd Al Jasrah, causing a fire on board. Following this, a missile fired from a drone hit the container ship MSC Palatium III, and a threat was also announced to another ship of the company, MSC Alanya. As of Sunday, MSC Palatium III was in motion in the Djibouti area, Al Jasrah was en route from Piraeus to Singapore in the Gulf of Aden, Maersk Gibraltar was in the Salalah area on its way to Tangier – judging by the expected travel time, bypassing the Cape of Good Hope.

On November 14, the Houthis announced that they would carry out strikes against Israeli targets, including the country’s commercial ships. Their most notable action was the seizure on November 19 of the ro-ro vessel Galaxy Leader, owned by the Israeli Ungar family, but without Israelis on board and carrying cargo from Turkey to India. Then on December 9, a Houthi spokesman said the movement would also prevent the passage of ships heading to Israel, regardless of which country they belong to.

Lloyd’s List estimates that a total of ten commercial vessels have been attacked since November 14, including six in the past week.

Only the ship attacked in December had connections with Israel, and even then extremely distant ones: until 2021, it was under charter from the Israeli ZIM.

Global shipping companies have refused passage through the Suez Canal before, as during the week-long blockage of the canal by the Ever Given in 2021 (see “Kommersant” dated April 6, 2021), and for economic reasons. For example, in 2020, against the backdrop of a sharp decline in the container market due to Covid and the low cost of bunker fuel for large lines, the long route was more efficient for some time. Let us recall that the fee for the passage of a 20 thousand TEU container ship through Suez, which is collected by the canal administration, is about $700 thousand. Bypassing Suez extends the China-Europe route by about ten days.

How much damage the withdrawal of container lines from the Red Sea will cause to global trade will depend on the duration of the situation. The damage from the week-long blockade of Suez in 2021 was estimated at $10 billion.

There is a growing likelihood that Western countries, no longer limiting themselves to condemning the Houthi attacks, will try to solve this problem militarily. According to The War Zone, US Defense Secretary Lloyd Austin, during a tour of the Middle East, plans to announce the launch of Operation Guardian of Prosperity to counter the Houthi threats in the Red Sea. Politico, in turn, reports that a US Navy strike group led by the aircraft carrier Dwight Eisenhower has already arrived in the Gulf of Aden.

Natalya Skorlygina