By Matt Strudwick 00:18 December 21, 2023, updated 02:27 December 21, 2023
Share or comment on this article:
- Iran-backed rebels have stepped up attacks on ships in the Suez Canal
Militants attacking ships along a key shipping route in the Red Sea could lead to stock shortages at Ikea, the Swedish furniture maker has warned.
Iran-backed Houthi rebels in Yemen have stepped up attacks on ships in the Suez Canal in recent days.
The rebels are believed to be attacking ships using the Bab el-Mandeb Strait, with the pro-Hamas group attempting to disrupt ships heading to Israel.
Major shipping companies such as MSC, Maersk, Hapag-Lloyd and CMA CGM have already suspended container transport through the area due to the increase in attacks.
Now Ikea has warned of delays and shortages of some products as the budget furniture maker looks for an alternative route for its cargo ships.
A spokesman for Inter Ikea Group said: “What we can communicate for now is that the situation in the Suez Canal will cause delays and may result in availability restrictions for certain Ikea products.”
Thousands of Houthi graduates who completed their military training take part in a military parade in Amran, Yemen, on December 20. Iran-backed Houthi rebels in Yemen have stepped up attacks on ships in the Suez Canal in recent days. A Houthi military helicopter flies over the Galaxy Leader cargo ship in the Red Sea on November 20
OL USA CEO Alan Baer has teams advising shipping and logistics clients to prepare for at least 90 days of disruption in the Red Sea.
READ MORE: How attacks by Iran-backed Houthi rebels on Red Sea shipping could lead to higher living costs for Brits
“It doesn’t help that it’s Christmas weekend,” Mr. Baer said. “From now until January 2nd there will be a quiet period and then everyone will be hectic.”
The shipping route is an important area for global trade, particularly for the transport of oil, grain and consumer goods from East Asia.
Ships travel through the Suez Canal on the busy waterway to deliver a large portion of Europe's energy supplies.
This came after the Houthis warned ships not to sail in the area during the recent rebel attack.
Two merchant ships – the MSC Clara and the Norwegian Swan Atlantic – were attacked by naval drones on Monday.
Houthi spokesman Yahya Sarea said the attacks came after their crews failed to respond to calls from the group.
Ikea has warned of delays and shortages of some products as the budget furniture maker looks for an alternative route for its cargo ships. The rebels appear to be targeting ships using the Bab el-Mandeb Strait and the pro-Hamas group is trying to disrupt traffic. Ships heading to Israel A Houthi fighter stands on the cargo ship Galaxy Leader, which is in the It was hijacked by the rebel group in November after claiming it was Israeli
The owner of the Swan Atlantic said the ship was hit by an unknown object, but none of the crew were injured.
According to LSEG, the MSC Clara is a Panama-flagged ship.
Several “projectiles” were fired from Houthi-controlled territory at a ship in the southern Red Sea on Monday, U.S. officials said.
READ MORE: Groups of men were seen touring the Galaxy Leader after Iran-backed Houthi rebels laid siege to the ship in the Red Sea
The Houthi movement has launched a series of rocket and drone attacks on ships in the region, which it says are a response to Israel's attack on the Gaza Strip.
There was no immediate claim of responsibility for the latest attack.
Several major freight carriers have begun sailing around Africa, adding costs and delays that are expected to get worse in the coming weeks, according to industry analysts.
About 15 percent of global shipping traffic passes through the Suez Canal, the shortest shipping route between Europe and Asia.
Collectively, the companies that diverted ships control “around half of the global container shipping market,” said Albert Jan Swart, an analyst at ABN Amro.
“Avoiding the Red Sea will result in higher costs due to the longer travel time,” he said.
The oil giant BP also temporarily suspended all transits through the Red Sea after the weekend attacks.
The Galaxy Leader ship is escorted by Houthi boats. Groups of men were spotted taking selfies and touring the cargo ship. The Houthis have warned ships not to sail in the area during the latest rebel attack. The Houthis have sporadically attacked ships in the area, but attacks have increased since the Israeli attack began. Hamas War Two merchant ships – the MSC Clara and the Norwegian Swan Atlantic – were attacked by naval drones on Monday (Image: A Houthi military parade in Amran, Yemen). The Houthis also radioed ships to persuade them to change course closer to the territory they controlled
Norway-based oil tanker group Frontline said its ships would also avoid passage through the Red Sea and the Gulf of Aden in the future.
“War risk insurance premiums are rising, of course, but as ships are rerouted and Africa is rerouted, ship supply becomes tighter as cargoes travel longer.” “That would put strong upward pressure on interest rates,” said CEO Lars Barstad.
Rico Luman, an analyst at ING, said the diversions would add at least a week to container ship journey times.
Typically, transporting goods from Shanghai to Rotterdam via the Suez Canal takes around 27 days.
“This will cause delays at least in late December, with knock-on effects in January and likely February as the next round will also be delayed,” Luman said.
While freight rates are likely to rise on these longer trips as well, shippers are currently looking for ways to utilize excess capacity, said Zvi Schreiber, CEO of global freight platform Freightos.
“It is unlikely that interest rates will rise again to the level of the pandemic,” said Schreiber, referring to the economic impact of COVID-19 from 2020.
The Houthis have sporadically attacked ships in the region, but attacks have increased since the Israel-Hamas war began.
They have used drones and anti-ship missiles to attack ships and, in one case, used a helicopter to hijack an Israeli ship and its crew.
They have threatened to attack any ship they believe is heading to or coming from Israel.
Given recent attacks, this now appears to have extended to every ship, with the Houthis also radioing ships to persuade them to change course closer to the area they control.