The recent attacks by the Houthi group are having significant repercussions on global supply chains. As of now, 181 vessels have been diverted due to the ongoing conflict, with 27 ships still remaining in the canal. An analysis by Project44 indicates that transit times for the affected vessels will be extended by 7 to 20 days. The volume of ships traversing the canal has plummeted by over 59% since the onset of the attacks. Project44, self-proclaimed as the world's leading platform for shippers and logistics service providers, has summarised the situation.
Photo © Denys Yelmanov | Dreamstime.com
The Houthi rebels from Yemen have been launching attacks on container ships in the Strait of Bab al-Mandeb using rockets and drones. Among the affected vessels are the Hapag-Lloyd ship Al-Jasrah, MSC Palatium III, M/V Swan Atlantic, MSC United VIII, and Maersk Hangzhou operated by Inventor Chemical Tankers.
The most recent attack occurred on December 31, 2023. On December 14, the Maersk vessel Gibraltar narrowly escaped a missile strike. Major shipping companies such as Hapag-Lloyd, MSC, Evergreen, and CMA CGM have temporarily suspended their operations in the Red Sea. Maersk resumed shipping traffic through the Red Sea but announced a new suspension following the recent attack on one of its vessels. Additionally, the oil and energy company BP has halted its activities in the Red Sea.
On December 18, a coalition comprising the United States, United Kingdom, Bahrain, Canada, France, Italy, the Netherlands, Norway, Spain, and Seychelles launched "Operation Prosperity Guardian" concentrated around the Red Sea. The coalition aims to minimise risks for merchant ships, prevent attacks, and safeguard global trade. Several other countries have extended their support. In response to Maersk Hangzhou's distress call, the US sank three Houthi vessels. Immediately after, Iran deployed a warship to the region. The attacks persist, and the deployment of a warship by a Houthi ally threatens to further escalate the situation.
Ships in the region face the decision of either accepting the heightened risk of navigating around Africa or anchoring and waiting for safe passage.
Map of container vessels affected by Red Sea conflicts. Dark blue dots represent vessels that have been drifting. Light blue dots represent vessels that rerouted. Photo: Project44.
In early January 2024, Project44 estimates a total of 181 ships navigating around Africa. Project44's AI-driven Estimated Time of Arrivals (ETA) indicates that transit time for most navigating vessels will increase by 7 to 20 days. Some of the diverted ships have increased their speed to minimise resultant delays. However, this leads to higher fuel consumption, causing prices in the maritime transportation sector to surge.
Another 26 vessels remain at their current locations, monitoring the conflict's developments. Despite the launch of Operation Prosperity Guardian, these ships avoid passage, indicating lingering apprehensions among shippers regarding the Red Sea's safety. Project44 notes that some vessels previously marked as diverted are returning to the strait, primarily ships operated by Maersk, which briefly resumed activities in the Red Sea. It is likely these ships will retreat after the weekend attack. The "Map of container ships affected by the conflict in the Red Sea" offers an overview of all 207 affected vessels.
Compared to December 21, the scale of the impact has increased. The Cape of Good Hope experiences heavier and consistent maritime traffic. Many of the ships waiting for an improved situation are now navigating around the Cape of Good Hope, while some remain in their positions.
Despite heightened risks, some ships continue their planned schedules. In the week from December 17 to December 24, a total of 66 ships traversed the canal. In the week from December 24 to December 31, significantly fewer ships, only 33, remained, indicating a 55% decrease in daily maritime traffic. Whereas almost 15 ships sailed daily before the attacks, currently, the number stands at merely 6.6 ships per day.
As shipping companies announce plans to redirect ships, trade routes utilizing the Suez Canal must prepare for substantial delays. Trade between Asia and Europe/Mediterranean is most affected, accounting for four of the top five key transport routes. Trade between North America (particularly the East Coast) and Asia could face heavier repercussions due to ongoing drought issues at the Panama Canal, as it serves as the most efficient diversion option. While the mentioned trade routes account for the highest number of trips through the canal, over 33 other trade routes regularly use the canal and are also affected by the conflict.
Source: www.project44.com