Germany's HapagLloyd and Hong Kong's OOCL announced on Thursday that their cargo ships would avoid the Red Sea. The latest shipping companies to make such a decision came after attacks on ships by the Houthi group in Yemen rocked global trade.
HapagLloyd said it would divert 25 ships from the main waterway by the end of the year as freight rates increased due to the situation in the region. Avoiding the Red Sea and Suez Canal means taking a much longer route around Africa.
The Iranaligned Houthis, who control much of Yemen, have been attacking ships passing through the Bab alMandab Strait at the southern tip of the Red Sea for weeks, in what they say is a response to Israel's war in Gaza.
Meanwhile, shippers are struggling to find alternative sea routes or other options, including air transportation, as travel through Africa adds about 10 days to cargo's journey time to its destination.
“So far, we have advised OOCLoperated ships to reroute or stop shipping through the Red Sea,” the container group told Portal on Thursday.
“We will continue to assess the feasibility of various options and take appropriate countermeasures depending on different conditions,” OOCL said.
“Retailers have already started to move away from just focusing on operational and logistical efficiency and speed and have become much more focused on operational resilience,” said Megan Paul, partner in the commercial team at Charles Russell Speechlys in London.
Finnish elevator manufacturer Kone estimates that some deliveries could be delayed by two to three weeks, but expects most deliveries to be on schedule.
COALITION
Greece said on Thursday it would send a naval frigate to the area to help protect shipping as part of a multinational coalition announced by the United States to ensure safe passage through the waterway.
In terms of cargo capacity, Greek shipowners control around 20% of the world's merchant ships.
However, several countries that the United States said would join the coalition have signaled that they do not expect to send much naval power to the region, while Saudi Arabia, which borders the Red Sea, does not participants was listed.
Meanwhile, the Houthi leader has threatened to expand attacks on US Navy ships, raising the prospect of a wider conflict around the Bab alMandab Strait.
A HapagLloyd spokesman said one of the company's ships, the Al Jasrah, was attacked near Yemen on December 15 while en route to Singapore and that the company would make further route decisions by the end of the year.
The spokesman said the company had not received detailed information about the U.S.led naval coalition protecting shipping in the Red Sea.
Shipping companies remain in the dark about the new naval force assembled by the United States, sources told Portal on Wednesday.
The consequences can also be felt directly in Israel. OCCL said Saturday that it would no longer accept cargo to and from Israel until further notice “due to operational issues.”
At the port of Eilat in Israel's far south, activity has fallen by 85% since the increase in Houthi attacks, the port's chief executive said Thursday.
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