Hope for a resumption of Suez Canal transits by container lines were dented over the weekend, after the US and Yemen’s rebel Houthis group traded missile attacks, according to The Loadstar website.
The news is a new blow to the Suez Canal Authority (SCA), whose chairman Ossama Rabiee Sunday held a high-level call with oversees MSC's global cargo businesses CEO Soren Toft.
The SCA said Mr Toft had “explained that the Cape of Good Hope is not the preferred option for the shipping line, given that it lacks navigational services, which means navigating it requires being careful more often, expressing his hopes for the permanent restoration of stability to the region, which will be reflected in MSC vessels returning once more to transiting the Suez Canal”.
However, during a Q&A session at S&P Global’s recent TPM25 conference in Long Beach, Mr Toft told delegates: “Suez simply isn’t safe to transit at the moment, and there’s no immediate prospect of a return. Eventually it will reopen, and when it does, we will follow suit.”
Meanwhile, shippers attending the conference urged parties to resolve the issue and resume transits as soon as possible.
Tom Behrens-Sorensen, chairman of ECCO Global Shoe Production, said: “To quote [former US national security advisor] John Bolton, ‘it’s inexcusable that the US government hasn’t put its foot down to protect freedom of navigation of the seas’.
“It really shouldn’t be all that difficult to find a solution to this, given what is going on in Iran at the moment,” he said, adding: “There are carriers already going through Suez, especially if they fly a Russian or Chinese flag.
“Also, CMA CGM is doing some transits, and once the first alliance resumes transits, others will follow,” he said.
However, Jack Kennedy, head of Middle East country risk at S&P Global Markets Intelligence, predicted in TPN25 a session that the Gaza ceasefire would break down and Houthis attacks would resume.
“The issue here is that the Houthis, all the way through their period of disruption and targeting of vessels in the Red Sea, have claimed that their attacks were only targeting Israeli, US, or UK-affiliated vessels. Our data shows that that only actually represents about 37% of the total attack incidents. The remaining 63% [of attacked ships] had no clear affiliation with any of those countries.
“We don’t know exactly how the Houthis are selecting their targets – we think it’s most likely a combination of open source intelligence and Iranian intelligence, but very frequently what we’ve seen is that this is incomplete, or out of date, and that compounds the risk of mis-identification. That’s why we think there’s going to continue to be a severe risk to any vessels in transit in the Red Sea or in the Gulf of Aden in the one-year outlook.
“We think the risk is going to be highest in or near Yemeni territorial waters, along the coastline of Yemen that’s controlled by the Houthi rebels, particularly around the port of Hodeidah. That’s where the Houthis have stored the majority of their anti-ship missiles, their attack UAVs, and that’s probably where any resumed focus of US-led airstrikes or Israeli airstrikes is going to be.
“So there’s also a very high risk to any vessels that are going to be in port at Hodeidah, of collateral damage from those kind of strikes,” he added.