The Red Sea crisis continues with a string of recent attacks on commercial vessels, as shipping lines are upgrading profits and warning of increased port congestion for international traders.
Over the last week, as many as four vessels have been attacked while moving through the Gulf of Aden.
More attacks
On 20 July, the Pumba was attacked by a combination of drones and unmanned vessels, with no reported casualties.
The Chios Lion, the Bentley I and Lobivia were attacked in a similar manner last week. No crew were reported injured and the vessels continued to their destinations.
The attacks have been continuing at a steady pace over the last few months, with as many as 15 vessels targeted in June.
June troubles
While the majority of these resulted in no injuries to the crew or damage to the ship, the tanker Lavant and carrier Verbena were both abandoned following the attacks. The Lavant was later reported sunk, while a member of the Verbena was reportedly “severely” injured.
Additionally, one crew member was reported dead in an attack on the vessel Tutor.
Shipping and mariner welfare groups, including the International Chamber of Shipping and BIMCO, have condemned the attacks and called for more to be done to safeguard shipping.
“This is the second fatal attack in which our seafarers have been caught in the crosshairs of geopolitical conflicts. Three seafarers tragically lost their lives when the True Confidence was attacked earlier this year.
“And we must not forget the crew members from the Galaxy Leader and MSC Aries who are still being held captive.”
Data from Lloyd’s List Intelligence data showed that there was an average of 204 daily transits for the week commencing July 15, down from 221 the week before. Lloyd’s List also warned:
“When compared to the same week in 2023 the difference is even more stark, with 395 average daily transits recorded in week 29 of 2023 compared to 204 in 2024.”
Houthi
US Central Command has been reporting a steady stream of attacks against Houthi missile launchers and drone sites, but has not yet appeared to have resolved the issue.
Israel has also hit sites in Yemen, prompting fears of a regional escalation in conflict.
The UN Special Envoy to Yemen, Hans Grundberg, warned the UN Security Council that there was a real danger to shipping after the attacks.
"I remain deeply concerned about the continued targeting of international navigation in the Red Sea and its surrounding waterways," Grundberg said.
"Recent developments suggest that the threat against international shipping is increasing in scope and precision."
Escalation concerns
In terms of shipping costs, shipping analytics company Linerlytica said that any further escalation of the Red Sea crisis would have a limited impact on container markets, as only 14% of ships on the Asia-Europe route are using the Suez Canal.
Freightos reported that freight rates had actually dipped slightly last week, following two and a half months of steep rises.
Judah Levine, head of research at Freightos, said that as most container carriers were avoiding the Red Sea since December, “there should not be much impact on ocean freight” in the event of regional escalation.
Profits
The news of continued conflict and concerns of escalation concerns comes as liners are upgrading profit forecasts following months of increased rates and demand.
Japanese shipowner NYK increased its profit forecast for first half of the fiscal year by 8%.
According to NYK, “Due to the Red Sea situation, which has necessitated use of the Cape of Good Hope route, containership supply-demand tightness and freight-rate conditions have exceeded our initial expectations.”
Other liners, such as Taiwan’s Evergreen and Israel’s Zim, made similar predictions as Asian shipping companies begin to release their Q3 and Q4 predictions.
Back in June, global shipping giant Maersk said that the continuing crisis, combined with growing port congestion, was “expected to contribute to a stronger financial performance in the second half of 2024.”
