Recent attacks in the Red Sea have stirred turmoil for shipping companies, compelling them to redirect their vessels and thereby triggering potential delays that might reverberate across the global economy.
Houthi rebels from Yemen have launched a barrage of over 100 rockets at commercial ships within the Red Sea in the last two months. This crucial trade route handles almost one-third of global container traffic, and approximately a dozen vessels have encountered disturbances, including two attacked on December 19, as reported by a defense official to McClatchy News.
These attacks primarily target ships en route to Israeli ports, attributed by a Houthi spokesperson as retaliation for Israel’s military actions in Gaza, which resulted in nearly 20,000 casualties, a situation deemed a “humanitarian nightmare” by the UN Secretary-General.
In response, major shipping corporations have decided to avoid the region, opting for alternative routes. This rerouting strategy, while mitigating risks, will compel ships to traverse significantly longer distances, potentially causing delays and inflation in prices, especially concerning oil and gas, according to experts consulted by McClatchy News.
Assessing the potential impact, experts diverge in their opinions, with some contingent upon the efficacy of the bolstered presence of the U.S. Navy in the region to quell these attacks.
In the aftermath of the Houthi strikes, notable container ship companies such as Maersk, MSC, CMA-CGM, and Hapag Lloyd have confirmed their rerouting plans, signaling a significant shift in maritime routes, emphasized by Mary Brooks, a shipping industry expert.
BP, a major global oil company, has temporarily halted all traffic through the region due to heightened security concerns, as relayed by a company spokesperson to McClatchy News.
Phillip Wolfe, a director at American Global Logistics, characterized this mass rerouting as unprecedented in his 12-year tenure, citing a comparable disruption last seen in March 2021 when the Ever Given ship jammed the Suez Canal for six days, impacting hundreds of vessels and supply chains to multiple American ports.
Michael Manjuris, a global management studies chair, highlighted that while around 50 tankers typically traverse the Suez Canal daily, recent rerouting trends suggest a significant increase, with up to 32 ships a day opting for alternative routes, indicative of the dynamic nature of the situation, noted by Allen Morrison, a professor at Arizona State University.