Red Sea Houthi Attacks: Implications for Global Trade
month curbed the number of vessels that could ply the waterway that connects the Atlantic and Pacific oceans due to a drought.
Fortunately, the shipping industry has learned the lessons from the post-COVID supply chain crisis, and many firms have expanded their fleet of cargo vessels, meaning the impact of any lasting Red Sea rerouting won’t be as disastrous.
“Right now, we have an overcapacity of container vessels, so in the absolute worst case, where we have to continue to go around Africa for a time, we do have the container vessels in the world to do this,” Jensen said.
For the first few days of the current crisis, shipping firms had kept their vessels in a holding pattern in the hope that the attacks would be curtailed or security in the region would be quickly increased.
“This week, more and more vessels are being redirected to go around Africa, which seems to indicate the carriers are beginning to lose faith that this crisis can be resolved very rapidly,” Jensen added.
U.S., Allies Step Up Naval Security
On Tuesday, the United States announced a multi-nation operation to safeguard maritime commerce in the Red Sea. As part of the measure, Britain, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain will stage joint patrols in the southern Red Sea and the Gulf of Aden.
US and British warships in the area have begun shooting down Houthi missiles and drones in recent days. However, it is unclear whether the presence of a larger naval force will be enough to halt the attacks altogether.
Some ships are, however, continuing to ply the Red Sea, albeit with armed guards on board, in case their vessels are boarded by Houthi rebels, who insisted Tuesday that the US-led security operation would not deter them.
“[With Ever Given] it was easy to see that it would soon be resolved. This is more tricky because what is it going to take to get the Houthis to stop launching missiles and drones at the ships, especially as they are drawing attention to the [Israel-Hamas] conflict?” Jensen told DW.
Shipment delays won’t affect Christmas shopping, but there is the potential for stores to run low on stock by February if the delays continue, supply chain research firm Project44 said in a note on Tuesday.
Other analysts have warned that while container shipping may be hit harder overall, the delay to vessels carrying fossil fuels to Europe may be felt first.
“We see energy shipments being impacted right here, right now — whether that’s oil or coal or gas — simply due to winter in the northern hemisphere,” Sand told DW. This could lead to a knock-on effect on energy prices.
Nik Martin is editor and content producer at DW. This article was edited by Kristie Pladson, and it is published courtesy of Deutsche Welle (DW).
