Shipping industry in the dark over US-led Red Sea naval power

LONDON:

Shipping companies remain in the dark about a new international naval coalition being formed by the United States to fight attacks in the Red Sea, with many ships continuing to avoid the area or canceling contracts, sources said on Wednesday.

The sources, which include maritime security and maritime security officials, say few practical details are known about the initiative Washington launched on Tuesday or whether it would be directly involved in the event of further armed attacks at sea.

Iran-backed Houthi fighters in Yemen have since November 19 stepped up attacks on ships in the Red Sea to show support for Hamas as Israel’s military offensive on Gaza continues.

Their leader said on Wednesday that the group would strike US warships if targeted by Washington.

Houthi fighters fired missiles and launched sea attacks on ships from speedboats. The missiles fired have been repelled by US warships.

“There are still a lot of unknowns with the coalition. We don’t know exactly how many warships will be involved, how long it will take those vessels to reach the area, or their rules of engagement and the actual protection system that will be put in place,” ​said Corey Ranslem, managing director of UK-based maritime risk consultancy and security firm Dryad Global.

“Globally this is a fairly small area, however providing protection to merchant ships in this area could be a significant undertaking depending on the number of vessels along with any changes in Houthi tactics.”

On November 19, Houthi commandos landed a helicopter on the aircraft carrier Galaxy Leader and brought it back to the northern port of Hodeidah, Yemen. The boat and its crew are still being held.

Also read: Houthis seize ship in Red Sea with connection to Israeli company

The attacks have disrupted a key trade route linking Europe and North America to Asia via the Suez Canal and sent container shipping costs soaring as companies seek to transport their goods via alternative, often longer, routes.

Dryad’s Ranslem said the threat to merchant shipping is likely to continue as the war continues.

“Numbers of global shipping companies are diverting around Africa or completely suspending their operations in this region. If the coalition’s efforts are not effective, we expect more shipping companies to divert around the Cape,” he said.

Traffic through the narrow Bab al-Mandab strait connecting the Red Sea and the Gulf of Aden fell by 14% between December 15-19 compared with December 8-12, according to data from ship tracking and marine analytics company MarineTraffic of AIS. .

US Defense Secretary Lloyd Austin, during a visit this week to Bahrain, home to the US Navy’s Middle East headquarters, said Bahrain, Britain, Canada, France, Italy, the Netherlands , Norway, Seychelles and Spain were among the nations involved in the Red Sea security operation.

The group will conduct joint patrols in the southern Red Sea and the adjacent Gulf of Aden.

“Are they going to do anything but shoot the missiles out of the sky? If that’s all, then will it give the assurances they need for the shipping companies? We don’t know yet,” said a shipping industry source.

“The market needs to see some success or some action,” another source said.

Read: Brent lingers near $80 as Red Sea tensions rise

The International Chamber of Shipping said it expected the new task force to enable a “coordinated effort involving a large number of military warships to provide a significant deterrence response”.

PHOTO: REUTERS

Voyages to the Red Sea stopped

Container shipping companies in particular have continued to discontinue their journeys through the Red Sea, using instead a route around Africa that adds days to travel times and increases costs. This in turn has fueled concerns about delivery delays and price hikes that could spark a new bout of inflation worldwide.

“We will continue to reschedule all ships scheduled until December 31. We will then reassess the situation and make a decision,” said a spokesman for Germany’s Hapag Lloyd.

Another shipping industry source said some shipowners had canceled charters through the Red Sea citing “unsafe navigation” or demanding a risk premium on top of compensation for rising war risk insurance coverage.

There is already a US-led Combined Naval Force that includes 39 countries and is based in Bahrain. Its main goals are “fighting drugs, combating smuggling, suppressing piracy, encouraging regional cooperation,” according to its website.

The new coalition will initially be led by the United States and Britain, and other members will over time “be persuaded to do their part,” said Gerry Northwood, a consultant to maritime security company MAST and a former commander of the British navy.

“So the industry is going to have to squeeze it in,” said Northwood, who once commanded warships in the area.

“Rules of engagement will be shaped to allow ships to defend shipping from surface and air threats. Taking the fight to the Houthis ashore will be a different operation.”