Red Sea Shipping Chaos: How Severe Is the Disruption?
Over the weekend, the US and the UK navies shot down 15 drones launched from Houthi controlled areas of Yemen. Now some of the world’s largest shipping companies are now saying that they will pause transit through the waterway. Let’s discuss all of this with Guy Platten. He’s secretary general of the International Chamber of Shipping. Guys, thank you so much for joining us. We also heard from the US defense secretary that they will send a task force, a maritime task force, to try and deal with the situation. How risky is this? Because maybe the Houthis do want
to rope the US into this. I think firstly, we absolutely condemn what the who these are doing to boats and shipping. The innocent seafarers are now being put at risk and shipping has a right of innocent passage and is against all international law. So I think what we do welcome is this broad coalition, the announcement, this broad coalition of navies to help protect and out security to the Red Sea. And clearly, companies are making their decisions based on the current situation. So we wait to see further details. But, you know, the reaction of the US
Navy and the British Royal Navy in shooting down missiles and drones is to be welcomed because it has protected seafarers. But does it get worse before it gets better?
reroute their ships. And bearing in mind is container traffic is about 22% of the traffic that passes through the Red Sea. So that’s quite a significant impact. Plus, if you look at some of the BP with the tankers as well. So there’s going to be some significant disruption. There is, of course, an alternative route, which is around the south coast of South Africa, around the Cape of Good Horn, But that adds 9000 kilometers or about 6 to 14 days to avoid. So clearly, there will be disruption until I think companies have the much more committed
to the security, the ships transiting the Red Sea. So could you explain to us and this is what I was told this morning, that if you’re a big, you know, tanker actually shipping LNG or shipping oil, you can stop at another port and you have the facilities to be able to move it round. It gets really tricky if you’re a cargo ship again, does that how much traffic worldwide could that hit? Is it similar to the Suez Canal a couple of years ago, or is it just a different, you know, route in terms of traffic?
I mean, that’s a really good analogy because the Suez Canal blocked was blocked for seven days and ships had to reroute. And that’s exactly what shipping companies are deciding to do now. So the you will see effect on the disruption delays as a result of this. The ships will still be able to take their cargoes to the destination. It’ll just be by a different route, a longer route which will add delay and possible cost as well. But they still can get round. I think Suez has more traffic on the Red Sea, am I right? Well,
most traffic will pass through the Red Sea on the Suez Canal. So I mean, it’s a vital link between Asia and Europe and vice versa. So ships will transit through the Mediterranean Sea, down through the Suez Canal, down to the Red Sea and out to Asia and vice versa. So by deciding not to go down the Red Sea, they won’t be transiting through the Suez Canal. So it will have an effect on that. But it can be rerouted, say, around the Cape of Good Hope that it does that considerable delay to the voyages. So I’m
sure you’re in contact with the chief executives of Maersk BP. Are there any other big companies that you think will reach out And what how much you know, what would it take for them to come back to that route? I think firstly, the reason why companies are making this decision is that for them to make that decision is primarily on safety grounds. You know, the safety of the crew, the safety of the seafarers who must be protected. So that’s the primary driver for all of this. I think once we see the detail of the naval
coalition, once we see how it’s all going to work, once we see what the effect of this increased security in the area will be for shipping, companies will then make an assessment based on that. But it’s very early days for that now. And we just I think we need to see the next coming hours and days to see the effect, whether this rerouting is going to be more a longer term or is it just a short term disruption. How worried are you about shipping becoming more dangerous and more expensive in the long run? It’s been
two or three years because of geopolitics, because of the war in Ukraine, because of what we’re seeing now, even because of COVID, It just feels like it’s a very tough time for shipping its and shipping is very resilient, are seafarers are very resilient and they go about their job in a professional manner day to day. But you’re quite right, security has become worse globally in the last few years. We had all the disruption from Covid when seafarers were denied access to shore leave or to be even do a crew change. We’ve got obviously piracy off
the coast, the Gulf of Guinea. There’s obviously a Ukraine Russia conflict as well. So, you know, it’s. The security tensions are rising and it is a worrying situation for shipping. But shipping is again resilient and will always try and find a way through in the most safest possible way.
