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Tension in the Red Sea: Houthi Attacks Threaten the Global Supply Chain

Updated: May 9

Since November 2023, a group of Shiite Islamist rebels in Yemen, called Houthis, has been carrying out attacks against cargo ships passing through the Red Sea. This stems from increased tensions in the region due to the conflict between Israel and Hamas. Although this group of rebels has claimed that their attacks are solely aimed at vessels destined for Israel.

These attacks have taken place near the Bab al-Mandab Strait, a 32-kilometer-wide channel separating northeast Africa and the Arabian Peninsula, and have posed yet another facet to the growing risks for global maritime transportation and the global supply chain.

The Red Sea serves as a gateway to the Suez Canal.

The importance of the Red Sea lies in its role as a vital passage to the Suez Canal, where between 50 and 60 vessels transited daily, averaging around 19,000 per year, according to Container XChange. Additionally, the canal handled approximately 12% to 15% of global trade in 2023. However, it experienced a 42% decrease in trade volume during December of that year and January 2024 following the attacks, according to the United Nations Conference on Trade and Development (UNCTAD). Meanwhile, the Red Sea saw a 30% decline in trade volume, according to the International Monetary Fund (IMF).

In this context, the ongoing attacks in the Red Sea and the escalation of geopolitical tensions in the region have increased risks for shipping lines using this route, leading to a crisis that hampers vessel transit through a crucial commercial route like the Suez Canal.

The Cape of Good Hope as an Alternative Route.

In response to the ongoing attacks in the area targeting vessels such as the "Maersk Gibraltar," "Al Jasrah" from Hapag Lloyd, and "MSC Palatium III," among others, shipping lines including MSC, CMA CGM, Maersk, Hapag-Lloyd, and Evergreen have suspended their transit through this zone completely until further notice. Instead, they have opted for a safer but longer and costlier alternative route, the Cape of Good Hope, a detour around the African continent for voyages from Asia to Europe, in order to protect their crews, ships, and cargo.

However, departing from the Red Sea and taking the lengthy detour around the southern tip of Africa adds around 3,500 nautical miles (6,500 km) and 10 to 12 days of sailing time to each journey. It also requires additional fuel (valued at US$1 million according to some estimates), finding alternative ports of call, adjustments to delivery schedules, and rising costs, according to El Tiempo newspaper. Additionally, diverting goods transportation between Asia and Europe via this alternative route is estimated to reduce the effective capacity of the journey between both parties by 25%, as noted by the Swiss bank UBS.

Below is an example of what this alternative route via the Cape of Good Hope represents compared to the route through the Red Sea for trade between Europe and Asia.

This detour around the African continent has had a significant impact on African port operations. Activity at major container ports in Africa improved year-over-year in the fourth quarter of 2023, with several of the key ports experiencing an increase in ship calls and container movements, resulting in higher demand for port and terminal infrastructure in the region. However, with some exceptions, African terminals were unable to keep pace with the increased ship calls and container volumes.

According to S&P Global Market Intelligence, port productivity decreased by over 18% at major African ports, primarily due to a significant worsening of vessel waiting times. Additionally, import container dwell time increased by nearly 10%, to 5.4 days, while export container dwell time skyrocketed by almost 90%, to over 8.5 days.

Repercussions of the crisis in the Red Sea.

• Longer distances

According to data gathered by Reuters, a journey between the port of Singapore and Rotterdam, Netherlands, has an estimated total time of 26 days if done through the Red Sea and 36 days if taken via the southern tip of Africa. The first trip will cover approximately 8,500 nautical miles (15,742 km), while the second will cover around 11,800 (21,853 km).

• Higher fees

Among the consequences of this new disruption to supply chains has been a notable increase in maritime transportation fees, following announcements by shipping lines diverting their vessels through the Cape of Good Hope. In this regard, a series of surcharges have been announced to cover the costs of transiting through a longer route and other expenses related to disruptions in the Red Sea.

• Increased Insurance Demand:

Due to the insecurity in the area, insurance policies for merchant vessels have increased and have become indispensable to acquire if one wants to transit through the area. Additionally, the insurance market offers hull and cargo products at affordable prices, providing the coverage shipowners need.

• Increase in Greenhouse Gas Emissions (GHG)

According to Gokcay Balci, assistant professor of logistics and supply chain at the University of Bradford, as a result of redirecting ships through the Cape of Good Hope, he estimates that the increase in CO2 emissions for each vessel taking this route is between 20% and 35%. This is because the journey is longer and more time-consuming, forcing ships to consume more fuel and release higher levels of greenhouse gas emissions.

• Environmental Disasters

The Houthis attacked the vessel "Rubymar" while it was transporting 22,000 tons of fertilizer through the Red Sea, causing a rupture in the tanker that led to a 29-kilometer oil spill. Eventually, the ship sank completely. This poses a considerable threat of environmental disaster.Escasez de contenedores, congestión y retrasos en los puertos

• Container shortage, congestion, and port delays

This crisis has led to a considerable increase in the demand for containers, causing cargo shippers to face the problem of a shortage of empty containers. Consequently, significant reductions in available space, as well as congestion and delays, are starting to be noticed in some Asian ports. This has begun to affect the reliability of vessel itineraries due to delays in departures.

• Increase in air freight

The recent disruption of maritime routes in the Red Sea has led some carriers to switch to air freight. The increase in demand has caused a rise in air cargo yields on related commercial routes, according to Willie Walsh, Director General of the International Air Transport Association (IATA).

• Sabotage in Communication Lines:

HGC Global Communications reported that three undersea cables in the Red Sea providing global internet and telecommunications were severed. The cut lines include Asia-Africa-Europe 1, Europe India Gateway, Seacom, and TGN-Gulf. These cuts affect 25 percent of the traffic flowing through the Red Sea, a crucial route for data moving from Asia to Europe.

In conclusion, this crisis in the Red Sea area has negatively impacted international trade and the global supply chain. The constant attacks in this Middle Eastern zone have resulted in a series of repercussions for maritime transportation, such as using much longer and more expensive alternative routes, increased chartering fees, higher CO2 emissions from ships, schedule discrepancies and uncertainty for shipping companies, among others.

The situation remains ongoing, making it difficult to estimate a swift solution; however, the need for effective cooperation to restore security in the region and resume vessel traffic is clear. Additionally, there is a need to seek long-term alternative solutions to reduce dependence on the Red Sea as a commercial route.

This is just one more event that has highlighted the fragility of global supply chains and the need for greater international cooperation to ensure the smooth flow of international trade. While the crisis in the Panama Canal is another significant factor impacting the current critical situation facing the supply chain, canal authorities estimate a substantial solution to this issue starting in 2028.

At SPARX, we understand the importance of maritime trade and the need to protect trade routes worldwide. As a company committed to safety, the environment, and efficiency in maritime transportation, we pledge to provide innovative and technological solutions to help mitigate these risks.

The evolution of the commercial crisis in the Red Sea (November 2023 -)


  • November 14: Houthi leader Abdul-Malik al-Houth threatened to attack ships with connections to Israel in the Red Sea in a televised message.

  • November 19: Attacks on cargo ships begin. The Houthis seized the Galaxy Leader vessel and brought it to the port of Hodeidah in Yemen.

  • December 14: The "Maersk Gibraltar" vessel was attacked with a missile, although the projectile did not hit the ship.

  • December 15: The "Al Jasrah" vessel from Hapag-Lloyd and "MSC Palatium III" were hit by missiles off the coast of Yemen.

  • December 17: The Suez Canal Authority (SCA) stated that, since November 19, 2023, 55 ships have been diverted through the Cape of Good Hope, while 2,128 have passed through the canal during the same period.

  • December 18: "Swan Atlantic" from Inventor Chemical Tankers and "MSC Clara" were attacked.

  • December 18: Major shipping lines, including MSC, Maersk, Hapag-Lloyd, CMA CGM, Yang Ming, and OOCL, announced the suspension of their vessel transits through the Bab el-Mandeb Strait. However, ZIM Shipping informed that its operations would continue without interruptions.

  • December 19: Evergreen, HMM, and ONE announced the temporary suspension of their import and export services through the Red Sea.

  • December 19: The United States announced an operation to restore security in the area, named "Guardian of Prosperity."

  • December 20: A 20% increase in maritime transportation fees was recorded after shipping lines announced the diversion of their vessels through the Cape of Good Hope.

  • December 21: Maersk announced a "transit disruption surcharge" of US$200/TEU for cargo diverted from the Suez Canal; CMA CGM announced new "contingency charges" to reflect the additional cost of diversion, including a rate of US$325/TEU on the Europe-North Asia route and US$500/TEU for Asia-Mediterranean; MSC also announced an "Emergency Operation Surcharge" of US$1,200/TEU on transatlantic services.

  • December 27: MSC confirmed that the container ship "MSC United VIII" was attacked in the Red Sea. It also stated that it would continue diverting vessels reserved for Suez transit through the Cape of Good Hope.

  • December 27: Maersk announced its plan to gradually resume transits through the Red Sea, citing the "Guardian of Prosperity" operation as a basis for considering the resumption of container vessel transit through the region.

  • December 29: Danish Shipping and the three largest Danish seafarers' unions reached an agreement to apply a risk premium to Danish seafarers passing through high-risk areas in the Middle East, effectively doubling their salaries to compensate for the danger posed by recent attacks in the area.

  • December 30: Maersk announced the attack on its vessel "Maersk Hangzhou" and the subsequent suspension of all transits through the Red Sea/Gulf of Aden until further notice.




  • January 2: CMA CGM announced an attack on its vessel "CMA CGM Tage." Meanwhile, Hapag-Lloyd has announced a new transportation service with a service frequency of 10 days to the ports of Tangier, Damietta, and Jeddah to serve the Red Sea.

  • January 7: The International Monetary Fund's PortWatch indicated that cargo traffic through the Bab el Mandeb strait in the Red Sea is currently 46% lower than since the attacks began on November 19, and 53% less than on January 7 of the previous year.

  • January 16: The bulk carrier "Zografia," owned by Greek shipowners, was hit by a missile in the Red Sea.

  • January 22: The Asia to Northern Europe route saw an 8% increase to $4,757/FEU in spot rates. Meanwhile, rates in the Asia to Mediterranean route rose by over $1,000 to approximately $6,700/FEU, according to the Batic Freightos Index (FBX). Transits through the Suez decreased by 64% compared to the same period last year, from 138 to 50. During the same period, transits through the Cape of Good Hope increased by 168%, from 77 to 206, according to Drewry's monitoring.

  • January 24: Two Maersk vessels, "Maersk Detroit" and "Maersk Chesapeake," were attacked.

  • January 31: Jihad Azour, Director of the Middle East and Central Asia Department at the IMF, declared that container shipping through the Red Sea has decreased by nearly 30%. Meanwhile, PortWatch reported that total transit volume through the Suez Canal decreased by 37% this year until January 16 compared to the same period the previous year.

  • February 6: The leader of the Houthi rebels in Yemen declared in a televised message that the group will escalate further if the war between Israel and Hamas in Gaza does not cease.

  • February 8: Maersk announced that its stocks dropped by 14.7% in the stock market, with an 87% decline in its net profit.

  • February 18: The Houthis attacked the "Rubymar" while carrying 22,000 tons of fertilizer. They opened a hole in the cargo ship, causing an oil spill extending 29 kilometers.

  • February 25: It was confirmed that the United States and the United Kingdom bombed 18 locations controlled by Houthi rebels in Yemeni territory, targeting land-based missile launchers, anti-aircraft systems, and drone warehouses.

  • March 1: The "Rubymar" finally sank in the waters of the Red Sea, posing a considerable environmental disaster threat due to its fertilizer cargo.

  • March 5: It was revealed that three undersea cables providing global internet and telecommunications were cut in the Red Sea. The cut lines include Asia-Africa-Europe 1, Europe India Gateway, Seacom, and TGN-Gulf, stated HGC Global Communications.

  • March 6: S&P Global Market Intelligence reported that port productivity decreased by over 18% in major African ports, due to worsening ship waiting times.

  • March 6: The United States Central Command stated that three crew members of the ship 'True Confidence' died in an attack by Houthi rebels in the Gulf of Aden. They are the first civilian casualties in the actions of the Yemeni rebel group.

  • March 7: Houthi leader Abdelmalek al Houthi stated that his group has launched a total of 96 ballistic missile and drone attacks against 61 ships in the Red Sea and the Arabian Sea in the last five months.

  • March 9: Houthi military spokesman Yahya Sarea announced that they launched an attack with multiple naval missiles and 37 drones against merchant ships and US military vessels in the Red Sea and the Gulf of Aden. This is the largest operation



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