Insecurity in international shipping intensifies as tension escalates in Red Sea, following US strikes in Yemen and Houthi attacks on shipping
Insecurity in international shipping has been heightened by escalating tensions in the Red Sea, following US strikes in Yemen and Houthi attacks on shipping, with many companies now avoiding the area for security reasons.
At the beginning of the week, the Ministry of Shipping already issued an information note to Greek-owned ships regarding the crossing of the area.
It is recommended that in case of deactivation of the automatic AIS identification system, the friendly operational shipping centers of the area should be informed immediately in order to have the necessary reaction time if required.
Vessels are also asked to avoid the 12th and 16th parallel and west of the 46th meridian for the next 48-72 hours, as the crisis period will last. The Houthis, however, do not seem to be deterred by the presence of the naval security forces that are in the Red Sea region. Even the “turning off” of the AIS automatic identification system seems not to work as a deterrent, as the American bulk carrier Eagle Bulk, which had deactivated this system since January 8, was hit by a missile off the coast of Yemen, fortunately without casualties injuries.
According to Bloomberg ship tracking data, 114 ships – including oil tankers, dry bulk carriers and container ships – are still plying the Red Sea in recent days.
One month ago this number was 272 ships and six months earlier 252.
Gas carriers have seen the biggest drop, with their number down 96% from a month ago. This is followed by container ships with a decrease of about 80%, oil tankers with a decrease of about 55% and dry bulk vessels with a decrease of 25% compared to a month ago.
More than 20 vessels were idle in the eastern Gulf of Aden, while several of them turned back after the warning issued by the combined naval forces.
Clarksons Research director Steve Gordon said on Thursday that tanker arrivals in the Gulf of Aden were down about 45% from 2023 levels.
The International Energy Agency in a report said that at the beginning of 2024, the risk of disruption of global oil supplies due to conflicts in the Middle East remains high, especially for oil flows through the Red Sea and, above all, the Suez Canal.
In 2023, about 10% of the world's seaborne oil trade, or about 7.2 million barrels mb/d of crude and oil products, and 8% of the world's liquefied natural gas trade passed through this important trade route.
The main alternative shipping route around Africa's Cape of Good Hope is extending voyages by up to two weeks – adding pressure to global supply chains and increasing freight and insurance costs.
The Piraeus Chamber of Commerce and Industry (EVEP) proposed a “ceiling” on freight charges to mitigate the “new wave” of price hikes in the market due to Suez. In particular, the EBEP, as a body that represents the import and export trade in the country's largest port, in a letter to the Prime Minister Kyriakos Mitsotakis and the ministers of the economic staff of the government, proposed the intervention of the Greek government to the European Commission in order to take measures for avoiding excessive burdens on goods due to the crisis in the Red Sea, which has accelerated transit costs to Europe. increase in freight rates, the imposition of surcharges, the cost of delivery delays and the final revaluation of the goods, will again be asked to be paid by the final consumer.
The Chamber considers that immediate measures should be taken at central European level so that, with appropriate directives, customs and tax charges are not imposed at 100% of the current and ever-increasing freight rates on goods transported by ships from Asia to Europe that make the African circumnavigation, but to be reduced by a percentage corresponding to the average levels of freight that would be paid when ships normally transit the Suez Canal, applying a “type of ceiling” to freight charges, based on the prices of the 12 December 2023, for as long as the war in the Red Sea lasts.
Shipbrokers report that a 40-foot container from a container ship making the African crossing from the port of Shanghai to any Mediterranean port between them and the port of Piraeus currently reaches $6,000.
Before the Houthi attacks in the Red Sea against International Shipping began, this container through the Suez Strait was at $1,500 to $1,800.