Houthi militants in Yemen continue to launch missile attacks on vessels transiting through the Red Sea, with most targeted ships bearing little to no affiliation with Israel. Confirmed attacks have been recorded on more than 40 commercial vessels since November 2023, with 34 vessels sustaining damage.
Recent attacks on general cargo vessels and bulk carriers have begun to inflict greater damage on vessels and crew members, with general cargo vessel “MV Rubymar” becoming the first ship to be sunk as a result of a missile strike since the crisis. The vessel was headed to Belarus from the United Arab Emirates with around 22 metric tons of ammonium phosphate fertilizer when it was struck by a Houthi missile while transiting through the Bab el-Mandeb strait on February 18. The vessel was subsequently abandoned before finally sinking on March 2.
In addition to cargo loss and potential environmental damage, the sinking of the Rubymar highlighted the potential for Houthi attacks to damage undersea telecommunications cables which run through the Bab-el Mandeb strait and facilitate connections between Africa, the Middle East, South Asia, and Europe. The U.S. National Security Council indicated that the Rubymar had inadvertently dragged its anchors and severed undersea communication cables while sinking.
A Houthi missile strike also caused the deaths of three sailors on board the Greek-owned, Barbardos-flagged bulk carrier “True Confidence” on March 6 – marking the first time seafarers have been directly killed in an attack.
The Houthi attacks are not the only threat to commercial vessels in the region as Somali pirates appear to have taken advantage of the recent instability to launch renewed hijacking attempts off the coast of Somalia. Several fishing vessels and at least two bulk carriers have been successfully hijacked by the pirates since December, marking the highest level of pirate activity off the coast of Somalia in six years. At least 13% of global seaborne trade is now estimated to be at risk of hijackings by Somali pirates or missile strikes by the Houthis.
Disruptions to global shipping widen impact
The ongoing attacks have had an adverse impact on global shipping costs and transit times as an increasing number of firms choose to avoid the Red Sea and the Suez Canal. Multiple shipping have recently announced Red Sea suspensions.
Sailing suspensions in the Red Sea has caused overall trade through the Suez Canal to drop by 50% compared to 2023 levels. Additionally, only around 40 container ships that still transit through the Red Sea daily compared to an average of over 100 vessels last year. The additional time taken to reroute vessels around the Cape of Good Hope or through the Panama Canal has also led to the schedule reliability of containerships decreasing from 56.8% in December 2023 to 51.6% in January 2024.
Container lines are also continuing to impose surcharges on cargo travelling through the region to cover additional fuel and insurance costs. Average shipping costs continue to remain far above 2023 levels with the Drewry World Container Index indicating that prices for FEU containers in mid-March are still around 107% higher than prices seen in mid-December 2023. However, the Index indicates that container costs have declined since the start of the year to $3,162 per FEU in mid March compared to the late Janaury peak of $3,964 per FEU. The decline in container costs is being attributed to new vessel deliveries that shipping lines had previously ordered to meet increased demand during the pandemic era.
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