The “Houthis” still control the Red Sea, and the announcement of an agreement in Gaza opens the door to the possibility of resuming shipping through Bab al-Mandab, a London-based weekly shipping news journal reported.
“A significant portion of the industry remains dependent on what the Houthis decide regarding the resumption of shipping through Bab al-Mandab,” Lloyd’s List added.
Executives in the shipping, insurance, and retail industries previously stated that companies transporting goods worldwide are not ready to return to the Red Sea route following the ceasefire agreement in Gaza, due to uncertainty over whether Yemen will continue to attack ships.
Reuters quoted executives in the shipping, insurance, and retail industries as saying that the risks remain too high to resume voyages through the Bab al-Mandab Strait in the Red Sea, a critical passage for exports from the Gulf and Asia to Western markets before entering the Suez Canal.
Jay Foreman, the CEO of Basic Fun, a US-based company that supplies toys to major American retailers like Walmart and Amazon.com, said, “There is no way I would put any of my goods on a ship that will pass through the Red Sea for some time in the future.”
“I will spend the extra money and ship everything via Africa. It’s not worth the risk,” Foreman added.
The shipping company Maersk announced its strong reservations about a swift return to shipping operations through the Red Sea. It emphasized that it would continue to closely monitor the situation before making any decision regarding the full resumption of its operations in the region.
Matt Castle, Vice President of Global Shipping at the logistics group C.H. Robinson, said, “It is unlikely that the industry will see a significant shift to the Suez Canal in the short term.” He added that this is due to challenges related to securing cargo insurance given the high risks and perceived time constraints, noting that it would take weeks or months to implement a new maritime shipping plan.
For his part, Craig Poole, Managing Director at Cardinal Global Logistics, whose clients include B&M Retail and Pets at Home, said, “If the Houthis stop their attacks, retailers might have to wait until the second quarter for shipping lines to fully change their routes.” He added, “It will definitely be a case of testing the route and ensuring that the ceasefire is genuine.”
For larger vessels, such as those carrying liquefied natural gas (LNG), any resumption will take longer due to the greater risks involved if such a ship, carrying flammable cargo, were to come under attack.
The Norwegian shipping company Wallenius Wilhelmsen, which transports vehicles by sea, stated that it will not resume sailing through the Red Sea until it becomes safe.
The European Union Naval Force in the Red Sea stated that its assessment of the threat has not changed.
According to international reports, Yemen’s pro-Gaza attacks have added at least $175 billion to shipping costs in the first ten months of 2024.
