Red Sea Shipping Returns But Not Enough: Report
Though shipowners and operators are returning to the Red Sea, it has had a negligible impact on total traffic, with transits through the Suez Canal and Bab el Mandeb hitting fresh lows in February, said media report. According to the report, some 159 distinct cargo-carrying vessels have either resumed transits through the Bab el Mandeb. Some among the said vessels had completely avoided the route during the heightened tension and uncertainty caused by Yemen’s Houthis.
The militant group started to attack ships passing through Red Sea, pledging solidarity with Palestinians, after the beginning of Israel’s genocidal war on Gaza. The group said to attack vessels having link with Israel, and the attack continued despite retaliatory attack from US, and UK, along several other Western countries.
Since the Houthis’ partial lifting of Red Sea restrictions, following the implementation of the Israel-Hamas ceasefire on January 19, vessels continued to pass through the route, but the figure is still low. According to the report, the vessels which stayed away from taking Red Sea route were seen most common after the ceasefire, as per report by Lloyd’s List.
Also Read: US Plans “Inspection Mechanism” At Sea Aiming Iranian Oil Exports
These vessels represent 16% of the total number of ships sailing through the Bab el Mandeb over the past six weeks. The figure accounts for 186 of the 1,309 voyages recorded during this time, said the report. Bulk carriers and tankers are driving the renewed interest in the beleaguered shipping lane.
While some companies have reassessed their risk since mid-January and adjusted accordingly, the Cape of Good Hope remains the preferred option for the vast majority, which opted to take the path during the early days of the conflict. “I think it is a bit of a wait and watch approach,” Standard Chartered global head of shipping finance Abhishek Pandey the Lloyd’s List during a panel at Marine Money at the end of January.
“Nobody is in a rush to say, okay, fine, the routes are open — let’s go. I think it will take some time.”
As per the report, the shipping’s hesitancy to commit to a Red Sea return is borne out by the data on traffic volumes. Instead of raising, the transit through Bab el Mandeb and Suez Canal fell 11% and 21% respectively between January and February this year, after reaching Israel-Hamas ceasefire.
Also Read: Shipping, Logistics Industries Lose Patience Over Red Sea Standoff
Seasonality’s role in the dip of traffic through the route cannot be ruled out. During the same period in 2023 Bab el Mandeb transits were down 11% month on month and Suez Canal was down to 13%. Volatility in the region means it is unlikely that owners and operators will abandon their cautious approach in the near future.
The fragility of Gaza ceasefire, caused by Israel’s refusal to resume talks for the agreed upon second phase and US President Donald Trump’s atrocious claim on “owning” Gaza, insinuating the forceful displacement of the Palestinians, makes Red Sea’s trading atmosphere volatile. Houthis vowed that they are ready to continue attack, if Israel is to violate the ceasefire deal. US has also branded Houthis as the terrorist organisation. These could derail the already fragile situation.
BIMCO chief security officer Jakob Larsen said: “With the increased likelihood of attacks on the Houthis, the uncertainty surrounding the Gaza ceasefire, bottom line is, however, that the security threat is increasing and the associated risk to merchant ships goes up a notch”, as quoted by the report.
