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Vessels avoiding Red Sea amid ongoing Houthi rebel attacks, adding costs and delays

Ongoing attacks against international vessels in the Red Sea by Houthi Rebels in Yemen is forcing major companies to reroute, adding costs and delays.

Leading global freight firms have begun avoiding the Red Sea and rerouting vessels amid ongoing attacks by the Iran-backed Houthi rebels in Yemen.

Oil giant BP on Monday was the latest major company to announce a pause in shipments through the Red Sea, following in the footsteps of Maersk, which had a vessel targeted by anti-ship missiles last week. 

The vessels have begun to sail around Africa, adding exorbitant costs and delays that industry analysts forecast will compound in the coming weeks. 

The Suez Canal, which connects the Mediterranean Sea to the Red Sea, is the shortest shipping route between Europe and Asia. It is estimated that about 15% of world shipping traffic transits via the waterway. 

ABN Amro analyst Albert Jan Swart, who spoke with Reuters, estimates that the companies forced to divert their vessels "control around half of the global container shipping market." 

Rico Luman, an analyst at ING, said the diversions were adding at least a week of sailing time for container liners. Typically, shipping goods from Shanghai to Rotterdam takes around 27 days via the Suez Canal. 


"This will at least lead to delays in late December, with knock-on effects in January and probably February as the next round will also be delayed," Luman said.

The Houthi movement has launched a series of missile and drone attacks on ships in the area, which it says are a response to Israel's assault on the Gaza Strip.

The war between Israel and Hamas, which began on Oct. 7, has sent shockwaves through the region, pitting the United States and its allies against Iran-backed paramilitary groups against each other and threatening to cause a broader conflict.

The shipping attacks, meanwhile, have prompted the United States and its allies to discuss a task force that would protect Red Sea routes, a move that U.S. and Israeli arch-foe Tehran has warned would be a mistake.

U.S. Defense Secretary Lloyd Austin on Monday arrived for talks in the region.


The International Chamber of Shipping association said on Friday that the Houthi assault on shipping lanes, which began last month, was an "extremely serious threat to international trade" and urged naval forces in the area to do all they can to stop the attacks.

Reuters contributed to this report. 

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