Update: The US has responded to the attacks in the region by initiating an international effort to protect ships in the area dubbed ‘Operation Prosperity Guardian’.
Canada, France and Spain are among those participating in the naval security operation, while the UK is also involved, providing Royal Navy destroyer HMS Diamond to help address what US defence secretary Lloyd Austin called a “deteriorating” situation, according to the FT.
Lloyd added that the operation would “tackle the challenge posed by this non-state actor launching ballistic missiles and uncrewed aerial vehicles at merchant vessels from many nations lawfully transiting international waters”.
Shipping firms Maersk, Hapag-Lloyd and Mediterranean Shipping Company (MSC) have announced suspensions of journeys through the Red Sea, in reaction to a spate of recent attacks on ships in the region.
Also among those to divert ships away from the area was French shipping company CMA CGM, while BP have today (18 December) also stopped all shipments of oil through the Red Sea, per the BBC.
‘Significant threat’
The BBC also reports that Houthis, a Hamas-supporting Yemeni group backed by Iran, have said they are targeting ships travelling to Israel in light of the ongoing conflict between Israel and Hamas.
A Maersk ship was among those to have been the target of recent attacks launched from Yemen, and a pause was placed on the company’s operations in the Red Sea on Saturday (16 December) until at least today.
A statement from the company said "the recent attacks on commercial vessels in the area are alarming and pose a significant threat to the safety and security of seafarers.”
It added:
"Following the near-miss incident involving Maersk Gibraltar yesterday and yet another attack on a container vessel today, we have instructed all Maersk vessels in the area bound to pass through the Bab al-Mandab Strait to pause their journey until further notice."
The suspension of shipping by Maersk, Hapag Lloyd, CMA CGM and MSC mean four of the five largest shipping firms in the world have stopped using the strait.
Suez affected?
The body in Egypt responsible for the Suez authority is also monitoring developments as MSC announced they would also be avoiding the use of the Suez Canal due to the attacks, per Reuters.
Chairman of the authority, Osama Rabie, said that current traffic in the canal was normal, but that the group is “closely following the consequences of current tensions”.
A total of 55 ships have taken the alternative route around the Cape of Good Hope in South Africa since 19 November, the authority said, but over 2,000 have used the canal in the same period.
Peter Sand, chief analyst at Xeneta, warned of rising costs as a consequence of the conflict, in conversation with The Loadstar.
“Depending on the scale and duration of any disruption at the Suez Canal,” he said, “we could see ocean freight shipping rates increase by anything up to 100%.”
IOE&IT’s perspective
Institute of Export and International Trade (IOE&IT) director general, Marco Forgione, appeared on BBC News over the weekend to discuss these developments.
He said the attacks “could not come at a more difficult time”, explaining:
“This impacts every link in the supply chain and will only increase the chances of critical products not making their destinations in time for Christmas.”
He also noted the impact this will have on “the costs for consumers as well as wider industrial capacity”.