The Danish Maersk and German Hapag-Lloyd companies extended the halt of all their shipments through the Red Sea yesterday after they recently returned to it against the backdrop of the formation of the US-led “Guardian of Prosperity” coalition to stop the attacks of the Houthi group in Yemen on commercial ships.
These two companies were not the only ones affected by these attacks; Rather, major international companies decided to change the route of their flights away from the Red Sea towards the Cape of Good Hope.
The attacks affect a vital trade route between East and West, especially oil trade, because ships reach the Suez Canal via the Red Sea, and also affect trade with Israel.
Eilat port
The CEO of the Israeli port of Eilat, Gideon Golber, said in the last third of last month that the port’s activity had declined by 85% since the Houthis in Yemen intensified their attacks on ships heading to Israel in the Red Sea.
The Houthi group says that it has escalated its attacks on ships heading to Israel to pressure the entry of aid to the Palestinians in the Gaza Strip, after the occupation prevented its entry following Operation Al-Aqsa Flood.
The port of Eilat deals mainly with imports of cars and exports of potash coming from the Dead Sea, and it also deals with a small percentage of Israeli trade compared to the ports of Haifa and Ashdod on the Mediterranean.
But the port of Eilat is located next to Jordan’s only coastal access point to the sea at Aqaba, and provides Israel with a gateway to the eastern world without the need to navigate the Suez Canal.
Eilat was one of the first ports affected by Houthi operations, as more and more shipping companies redirected ships to avoid the Red Sea after the Houthis disrupted a major trade route through the Bab al-Mandeb Strait.
The Israeli economic newspaper Globes reported that the port of Eilat unloaded only about 9,000 cars in October, compared to a regular quarterly total of between 37,000 and 47,000 cars.
Golper said last month that by closing the Bab al-Mandab Strait, the main shipping artery to the port of Eilat was closed, and thus the port lost 85% of its total activity.
He added: “We still have a small number of ships to export potash, but I think that with a destination in the Far East they will no longer travel in that direction and therefore that will also decrease.”
He continued: “Unfortunately, if this continues, we will reach a situation where there are no ships in the port of Eilat.”
Israeli officials say that the alternative route circumvents Africa (the Cape of Good Hope), which extends the time of trips to the Mediterranean by two to three weeks, and thus will cause additional shipping costs.
In another economic impact, the Israeli companies Azrieli, Shuversal and Melzron announced last month the closure of 4 of their online e-stores, as a result of attacks by the Yemeni Houthi group in the Red Sea and difficulties in supply chains to Israel, among other reasons.
According to the website of the Israeli economic newspaper “Globes”, with the risks posed by the Houthis in the Red Sea, which are expected to lead to “serious” problems in supply and import chains, in addition to the economic difficulties caused by the war on the Gaza Strip, these companies chose to get rid of ” failed investments, and focus on its core business.
Doubts
Logistics expert Wael Qaddour – in a comment to Al Jazeera Net – doubts the effectiveness of the US naval operation, saying that the success of a few Houthi group strikes empties the “Guardian of Prosperity” operation of its content.
He adds that if the second scenario occurs, the protection of ships, given previous similar cases, could be done for each ship individually, and this is expensive, and it may take the form of convoys, which means that each group of ships; It is protected by a number of warships.
Another maritime source who works for an international company, and refused to reveal his identity to Al Jazeera Net, said that the price of ships passing through the Red Sea amounts to tens of millions of dollars, and therefore companies are more careful not to harm them.
Facts about Israel’s trade
- Israeli merchandise exports reached $73.58 billion in 2022, an annual increase of 22.3%, according to data from the United Nations Conference on Trade and Development (UNCTAD).
- The value of merchandise imports reached $107.26 billion in 2022, thus recording a trade deficit of $33.68 billion.
- The United States is the largest destination for Israeli exports; It acquired a value of $18.67 billion in 2022.
- Israel controls a 9.5 km coastline.
- The number of ships flying the Israeli flag is 45, according to UNCTAD data.
Corporate reactions
This is an update on the shipping companies’ reaction, as reported by Reuters in a report:
- CH Robinson Global Logistics Group has rerouted 25 ships to sail around the Cape of Good Hope route and the number is likely to continue to increase.
- The French shipping group “CMA – CGM”: intends to gradually increase the number of ships in the Red Sea, but it will increase container shipping prices from Asia to the Mediterranean region by up to 100% as of January 15 compared to the beginning of the month.
- Belgian oil tanker company Euronav: avoids the Red Sea region until further notice.
- Taiwanese container shipping company Evergreen: changed the course of ships to the Cape of Good Hope, and temporarily stopped accepting the transport of Israeli goods.
- Norway-based tanker group Frontline Group: avoids transit through the Red Sea and Gulf of Aden.
- Norwegian shipping company specializing in car truck carriers Gram Car Carriers: has moved away from the Red Sea.
- South Korean container shipping company HMM: switched to the Cape of Good Hope route.
- Norwegian shipping company Hoegh Autoliners: transit stopped in the Red Sea.
- The Norwegian-based fleet operator, Klavenes Combination Carriers, has decided not to sail through the Red Sea unless the situation improves.
- Mediterranean Shipping Company “MSC”: decided not to pass through the Red Sea after the Houthi operations.
- Ocean Network Express, a Japanese joint venture between Mitsui OSK Lines, Nippon Yusen and Kawasaki Kisen Kaisha: decided to reroute ships to the Cape of Good Hope.
- Orient Overseas Container Line (OCL), based in Hong Kong: decided to change course away from the Red Sea and decided not to accept goods to and from Israel.
- Norwegian Wollinius Wilhelmsen Group: Stopped all trips in the Red Sea.
- Taiwanese Shipping Company Yang Ming: changed the course of ships towards the Cape of Good Hope.
