01 Mar 2024
by Amy McLellan

Red Sea remains on red alert as diversions continue

Due to international conflict, shipping is now coming round the Cape of Good Hope and across the Indian Ocean. Are ports along the longer route equipped to handle increased shipping traffic?

Attacks on shipping in the Red Sea area stepped up in the final weeks of February as Houthi rebels in Yemen landed direct hits on commercial vessels in what they say is retaliation for Israeli action in Gaza.

Previously, it was thought the US-led military operations in the region had blunted the capacity of the Houthis to launch strikes in this key waterway, which accounts for around 15% of global seaborne trade.

However, at the time of writing, the 24-person crew of the Belize-flagged Rubymar, which was carrying a potentially explosive cargo of fertilizer, was forced to abandon ship.

There were also reports of another attack 100 nautical miles east of Aden, said to involve the Greek-registered bulker Sea Champion, as well as targeting of bulk carrier Navis Fortuna, flagged in the Marshall Islands.

While there have been no casualties as yet, 25 mariners are currently being held after a Houthi-linked militia hijacked the Galaxy Leader in November and labour unions have secured agreement for seafarers to have the right to refuse to sail these high-risk waters.

The latest attacks come as the EU agreed to send a naval force, EUNAVFOR ASPIDES, to the region to protect international shipping, bolstering efforts already underway by the US and UK.

However, this latest escalation is unlikely to encourage shipowners to return to the Red Sea and Suez Canal.

London-based shipping consultancy Clarksons estimated that in the week to February 5, arrivals by container ships in the Gulf of Aden were 92 percent down on the average for the first half of December and traffic overall through the region was down 73 percent as ships sailed the Cape of Good Hope in southern Africa instead.

This detour is no easy decision, adding roughly 3,500 km and up to 14 days to shipping times, resulting in higher costs, increased fuel consumption and logistical bottlenecks in ports not used to this level of traffic

For some, however, it also means opportunities, with the potential to increase revenues at ports such as Durban and Richards Bay in South Africa and other African nations along the extended route. It isn’t clear, however, that these ports are ready to leverage this new geo-political opportunity.

Ian Wilkinson, Port Risk Manager at Denmark’s Risk Intelligence, says this ‘significant’ shift in trade routes has further increased the pressure on ports in southern Africa.

“A number of ports in southern Africa, especially those in South Africa itself, have seen increased congestion on the back of an already struggling port network and failing infrastructure,” explains Wilkinson, who has a background in the Royal Navy and private maritime security in Kenya.

He attributed the problems in South Africa to a lack of investment in both equipment and maintenance by the operating company.

These challenges are not new, nor will they be quick to resolve. “The issues in South Africa are far greater than increasing capacity to cope with increased demand,” says Wilkinson. “The whole port system there is subject to myriad problems of which congestion and delays are uppermost.”

The Red Sea crisis also presents opportunities to create new bunkering hubs to support vessels making the extra sea miles.

“Some ports, such as Port Louis in Mauritius, offer bunkering at Outer Port Limits (OPL), thereby making it a favourable bunkering location for vessels transiting the Cape of Good Hope,” claims Wilkinson. “The major Sri Lankan and other southern African ports also offer bunkering and facilities and this will bring increased benefits to companies and agencies in these ports.”

With the area still deemed high risk, and the situation in Gaza increasingly desperate, industry analysts are wondering how Red Sea shipping will return to normal.

“If the crisis in Gaza is resolved to the Houthi’s satisfaction, who will sign off on the first Israel-bound vessel or cargo, the first UK or US-flagged vessel?” wonders Wilkinson. “Will it take a declaration by the Houthis that they will cease further targeting? [Or] will Egypt attempt to pressure the Houthis as Suez transits decrease and thereby Egypt’s primary source of foreign currency?”

Inevitably, of course, this has ramifications for all of us, with continued disrupted supply chains and higher costs expected.

Main image: The Red Sea region; credit: Shutterstock