This month, the Houthi Militia announced an end to maritime attacks on Israel and have lifted their blockades at Israeli Ports. In theory, this is a big step in the battle for peace in the Red Sea. But does it mean that shipping can resume in this region?
The announcement was made by the newly appointed Houthi Chief of Staff, Yousef Hassan Al-Madani, who replaced Mohammed Al-Ghamari after he was killed in Israeli airstrikes. The ceasefire was made with the caveat that if the conflict in Gaza continues, then the Houthi Militia would resume their operations with renewed vigour on shipping routes. Earlier this year, the Houthis did observe a ceasefire but, when conflict resumed in Gaza, so did their activities. To date, Houthi strikes have killed 9 people and sunk four ships, forcing ships to re-route around the Cape of Good Hope.
The feeling among shipping analysts is that we cannot base the safety of crews, ships and cargo on the word of the Houthi Militia at this time. A tentative approach will be taken if and when further assurances are provided – not just for the sake of the shipping companies, but also for insurance purposes. Ambrey, a maritime security specialist, has reported a minor increase in shipping activity, as they re-evaluate company policies on avoiding the Bab el-Mandeb. They advise that for some, the risk has now returned to tolerable levels, but the decision to return to the route would be made on a company-by-company basis.
A complete return to the route would reduce the transport work required of the container fleet and potentially cause freight rates to plummet. However, the increased insurance cover needed to see a full resumption of this shipping route may mitigate any freight savings if risk is considered to be too high.
It looks like caution is required at this stage and a return to the Red Sea shipping route is still considered much too risky, despite the potential benefits. A large-scale return would require major network revamps for the big carriers, so certainty would be required over the safety and reliability of the route before any such rescheduling could take place.
