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Home Blogs Ed's Letter

Dire Straights

by William Craske
October 18, 2024
in Ed's Letter, FedEx, Houthi insurgents, Industry, Supply Chain
Reading Time: 3 mins read
A A
Image: tanaonte/stock.adobe.com

Image: tanaonte/stock.adobe.com

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The first strikes in response to Houthi operations in the Red Sea were co-ordinated by the United States and Great Britain on 11 January, barely a week into the new working year.

But by March three people on a commercial ship had been killed by another Houthi rocket attack in the Gulf of Aden with another four critically injured.

The use of anti-ship ballistic missiles against commercial shipping vessels was a new development legacy supply chains and US intelligence had not previously encountered.

Asymmetrical tactical warfare had made it, finally, onto the audit trail.

That these weapons can be launched at distances of 480 kilometres makes oil tankers and car carrying ships, like the Galaxy Leader, all but defenceless.  What’s more, from well beyond the horizon.

In November the Japanese-chartered ship, with 25 crew on board, was seized by the Houthi.

Ships that belong to Israel or its Western allies, they have claimed, are those foremost being targeted.

The Houthis, a Zaydi Shiite militia from Yemen, also have inexpensive Iranian-designed attack drones in their arsenal, like the 15-foot wide Samad, which has a range of up to 1,770 kilometres.

Economic disadvantages have brought with them other capabilities that are effective enough to reduce maritime traffic in the region to a chokepoint.

Despite being considered the poorest country in the Middle East, Yemen shares over 1,900 kilometres of coastline in and out of the Suez Canal, a trillion-dollar global trade route linking Europe and Asia.

With 15 per cent of the global economy reliant on passage via the Red Sea, controlling the waterways here remains of vital importance.

Even after months of intense naval operations, a coalition of military superpowers have, however, failed to secure the area where attacks and hijackings are now so commonplace the world’s largest container ship companies Maersk, Hapag Lloyd, and MSC, among them, have opted to avoid the Suez Canal where 30 per cent of global container traffic had until recently flowed.

Last December many of these companies decided instead to circumnavigate the Cape of Good Hope in Africa at no small inconvenience.

Shipping times and fuel costs soon blew out. Not to mention insurance premiums.

High-frequency transit estimates indicate that the volume of trade that passed through the Suez Canal dropped by 42 per cent compared to its peak in the first two months of 2024, while the volume of trade transiting around the Cape of Good Hope surged by an estimated 74 per cent above last year’s level.

The Suez Canal is located at the northern end of the Red Sea. At the southern point is the 32-kilometre-wide strait known in Arabic as the Bab el-Mandeb or in English as the Gate of Grief.

Until recently it accommodated an estimated 25,000 ships and nearly 2 billion barrels of oil.

More recently, a salvage operation to recover a Greek-registered oil tanker stranded ablaze in the Red Sea after an attack by Houthi militants was necessary to avert a potential spill that was set to become the largest ever from a ship in recorded history.

The Sounion, which the Houthis and maritime sources have said has been rigged with explosives, is laden with about 1 million barrels of crude oil.

This is not a movie.

Since last year, the Houthis have launched more than 100 attacks and the US Navy claims to have shot down more than 150 drones and missiles fired by the militia that controls one-third of Yemen, including the capital Sanaa.

With no sign of the crisis ending, mounting pressure in the region to recapture Hodeidah province and its ports from the Houthis, if order is to be restored to international shipping lanes by this time next year, is likely to test the willingness of nation states whose appetite for unilateral coercive measures to control the global supply of crude oil is not apparently what it once was.

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