Major Shipping Firms To Avoid Suez Canal Route Due To Heightened Security Risks

As Houthi terrorists in Yemen intensified their attacks on commercial vessels in the Red Sea, two significant freight companies, including MSC, the largest container shipping line in the world, said on Saturday that they would steer clear of the Suez Canal.

In reaction to the Gaza War, the Houthi movement in Yemen, which is supported by Iran, has begun assaulting ships on a route that enables East-West trade, particularly oil, to use the Suez Canal to save expenses as well as time for circumnavigating Africa. The outcome has been an increase in war risk insurance rates.

The Houthis claim that on Friday, off Yemen in the Bab al-Mandab Strait, at the southern end of the Red Sea, a drone targeted the MSC Palatium III, flying the flag of Liberia. A.P. Moller-Maersk (MAERSKb.CO) of Denmark suspended its container shipments via Bab al-Mandab on Friday, while the French shipping giant CMA CGM and the Swiss-based MSC joined on Saturday.

In a statement, CMA CGM stated that the situation is getting worse and that there is growing concern for everyone’s safety. Hapag Lloyd, a German container line, has hinted that it may follow suit.

ISRAEL: HOUTHIS ATTACK EILAT

The Houthis, who assist the Iranian-supported Palestinian Islamist Hamas organization battling Israel in Gaza, have increased their attacks on shipping in recent weeks. They have also shot drones and missiles towards Israel, hitting the Red Sea resort city of Eilat on Saturday.

According to U.S. Central Command, the Houthis launched 14 drones into the Red Sea early on Saturday morning, and the guided-missile destroyer named Carney had shot them down. Per a statement, the drones were determined to be one-way assault drones and were shot down without causing any damage to the vessels.

In addition, Britain reported that one of its battleships had taken out an alleged drone strike that was aimed at merchant shipping. The Houthis, who control a large portion of Yemen, have vowed to keep up their attacks until Israel ends its campaign, although they said on Friday that they were focusing on ships that were sailing toward Israel.

However, according to information from the ship tracking as well as maritime analytics service, Jeddah in Saudi Arabia was listed as the destination for both the Palatium III and the other MSC ship that was under threat, the Alanya.

One of the most significant shipping channels in the world for all kinds of commodities by sea is the Bab al-Mandab. The shipments comprise fuel and crude oil from the Gulf that are travelling westward to the Mediterranean through the Suez Canal or the adjacent SUMED pipeline, in addition to commodities that are travelling eastward to Asia, including Russia’s oil.

An additional seven days of travel could cost thousands of dollars due to the increase in Red Sea conflict risk premiums.

MSC announced that it would add days to the sailing schedules of ships scheduled to cross the Suez Canal by rerouting some services around the southern tip of Africa, the Cape of Good Hope.

Reference: Reuters

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