In the investing world, the Yemen Houthi rebels’ attacks on global shipping have been shrugged off, but they should certainly not be ignored.
Over the weekend, the Iran-backed Houthis warned they would attack all vessels in the Red Sea with links to Israel — a threat that needs to be taken seriously. But what’s developing now marks an even greater risk.
On Tuesday, a Norwegian-flagged, owned and operated tanker, Strinda, was attacked, despite having no clear ties to Israel and not being immediately bound for there. According to the Ashdod port website and maritime security firm Ambrey reporting, the vessel was not expected to be in Israel until January, meaning the level of risk has just increased for the maritime world.
Read more: What Red Sea attacks mean for shipping
“Ultimately, vessels bound for Israel, no matter what arrival date, are at risk,” explained Daniel Mueller, lead analyst of Ambrey’s Middle East region. “It’s hard to manage at this point. It takes a lot of oversight for the operators to review all of their calls.”
Mueller told American Shipper that the rebels are using port data as well as automatic identification system data to track what vessels — both in the near and short term — are bound to call Israel. Both American Shipper and Ambrey have attempted several times to access Israel’s Port of Ashdod website only to receive an error that it is currently down.
In an email to American Shipper explaining the site’s status, Ashdod spokesman Igal Ben Zikry said, “The company’s website works and works properly. The company has recently performed several maintenance operations, so in some areas there are difficulties browsing the site.”
Following Tuesday’s attack, the U.S. Navy destroyer USS Mason responded to the Strinda’s mayday call.
In an email to American Shipper, U.S. Central Command (Centcom) wrote, “The Houthi strikes against commercial vessels in international waters underscore the fact that this is an international problem. With the Houthi attacks, the ships were sailing in international waters and represented a variety of countries in terms of where they were flagged and who they were crewed by.”
Discussions took place among the U.S. and the 39 member countries involved in the Combined Maritime Forces to see if there will be an announcement of the naval forces to do an official escort of all vessels through the Red Sea and the Strait of Bab-el-Mandeb.
When asked about an announcement of an official formation of a maritime task force to escort vessels, Centcom said, “Discussions are ongoing. There are not any specifics to announce however, the framework is in place to enable such a task force and we expect an update in the coming week.”
So why the concern?
It seems there’s a global lack of understanding just how connected the world of trade is. Trade is made possible through a web of companies around the world. Ocean carriers and tankers move the world of trade on vessel routes. So while your container may not have a destination of Israel, the vessel that it’s on could be bound for Israel on its route at some point. Nearly every major ocean carrier serves Israel. The fact that Houthi rebels have expanded their targets of Israeli-connected vessels is one that has changed the logistics security game.
Some logistics managers have told me they have shippers asking if their cargo can be placed on a vessel that is not calling Israel.
Mueller said that while some container vessels have been going around the Horn of Africa to avoid the Red Sea risk, as of now, no tankers are observed diverting.
“However, this is likely because the voyage change is already confirmed when in port so that the vessel is not at sea and visibly changing voyages,” he added. “Tanker voyages are also not as fixed as container transits. It is a matter of risk appetite. The tanker trade may be less averse to risk, as profits can be higher. Any other measure will likely lead to an increased financial burden, whether through change of cargo, insurance premiums or longer voyage routes.”