Iran-backed Houthi rebels in Yemen have targeted commercial vessels with drones and missiles passing through the southern Red Sea. They say the attacks on ships destined for Israel are in solidarity with Palestinians and to facilitate humanitarian aid into the Gaza Strip. As a result, one major shipping company has had enough of the disruptions and decided to halt sails to Israel to avoid being attacked on the critical waterway that connects to the Suez Canal.
Bloomberg reports that Chinese state-owned shipping giant Cosco suspended all container ship transits through the Red Sea to Israel. This is to avoid being attacked.
The head of the Israeli Chambers of Commerce, Amir Shani, said Cosco informed him of the decision today. A source told Bloomberg that Cosco bookings to Israel will end next week.
Major shipping companies, such as Maersk and Hapag-Lloyd, suspended container ship sailings through the Red Sea in recent weeks. This has forced shippers to re-route cargo to the Cape of Good Hope, adding 1-2 weeks to sails plus additional costs. Longer sails have reduced container capacity, which has sent shipping rates surging higher.
So far, shippers have diverted more than $200 billion in trade over the last several weeks.
As of Monday morning, there are no container ships with destinations for Europe and North America in the Red Sea.
However, Bloomberg noted a "majority of oil and gas tankers continue to transit the Red Sea despite ongoing attacks, although some vessels have taken diversions to avoid the route."
Still, the critical waterway that's responsible for 10-12% of global seaborne trade by volume is still a highly contested area. Yet more evidence of the Pentagon's Operation Prosperity Guardian mission to police the Red Sea is failing.
