Last week, the Houthi rebels - Iran’s proxies in the south-west of the Arabian peninsula - made it clear that the threat to ships under Israel ownership and to the shipping lanes in the Red Sea is not an empty one. The terrorist organization began to hit ships with connections, however weak, with Israeli businesspeople, among them Udi Angel and Idan Ofer.
On Sunday, global maritime risk management firm Ambrey reported that an Israeli tanker had been attacked near Yemen. The ship was the Central Park, sailing under a Liberian flag, and owned by Ofer’s Zodiac Maritime. The ship has since been rescued by the US Navy and its attackers captured.
On Saturday, the terrorist organization attacked a Malta-flagged vessel, the CMA CGM Symi, using an Iranian-produced Shahed-136 suicide drone. According to AP, the ship was damaged but there were no casualties. The ship is owned by Singapore-based Eastern Pacific Shipping, which is ultimately controlled by Ofer. A week earlier, Houthi forces hijacked a Japanese ship carrying cars from Turkey to India, landing on the vessel by helicopter.
These attacks were on ships partially owned by Israelis, but the main threat is not to Israeli shipping, but to the viability of any partnership between Jews wherever they are and non-Israeli shipping companies. All three incidents involved foreign companies carrying cargo between foreign countries and crew who were not Israeli.
The cargo vessel attacked at the weekend, the Symi, carries, as mentioned, the Maltese flag, and the company that owns it, Eastern Pacific Shipping, is controlled by Idan Ofer but he does not own it outright. The ship that the Houthis hijacked last Sunday, the Galaxy Leader, is registered in the Bahamas, and is owned by a company registered in the Isle of Man, Galaxy Maritime. The ship is managed by a Greek company, Stamco Ship Management Company Limited, and chartered by Japanese shipping company Nippon Yusen K.K. (NYK).
On its deck are 25 crew of various nationalities, from the Philippines, Ukraine, Bulgaria, Romania, and Mexico. Israeli businessperson Abraham (Rami) Ungar, through his Ray Shipping group, is a part owner of the vessel.
Judah Levine, head of research at Israeli online freight marketplace Freightos, a digital platform for management of shipping via cargo ship, airplane and truck that facilitates real-time price comparison, identifies a rise in freight prices between Israeli ports and China following the outbreak of war. "This is already affecting all goods reaching Israel from China and landing at Ashdod Port, the prices of which have started to rise in the past few weeks," he told "Globes". "This is a deviation from the general trend in trade between Asia and the Mediterranean area, where we have actually seen slight falls in the same period."
According to Freightos’s data, the shipping price for any container from China to Ashdod Port rose by 9-14% in the last two week of October, putting it 5% higher than the level before the outbreak of war. Meanwhile, the price of shipping between Asia and other Mediterranean countries fell 7% in the last two weeks of October and is down 8% since October 7.
Levine adds that maritime traffic at Israeli ports has not changed appreciably since the outbreak of war, but that because of delays, apparently caused by a manpower shortage at the ports, or by rocket fire, there are larger hold-ups than usual. Shipping line MSC, for example, reported traffic jams at the entrance to Ashdod Port, and Evergreen Line diverted ships to Haifa.
Re-routing
Levine, who sits at a node of information on all shipping lines around the world, speaks of the beginning of a hit to trade between Israel and Asia. For example, other ships owned by Ungar’s Ray Shipping have steered clear of the Bab el-Mandeb Strait between the Arabian peninsula and Africa in order to avoid attack. The company’s Glovis Star entered the Red Sea through the Suez Canal on its way to China, but turned around after the attack on the Galaxy Leader, re-entered the canal, and moored there on Monday.
Another ship in the same fleet, the car carrier the Hermes Leader, stood close to the coast of Yemen at the time of the attack, and also turned back northwards in the Red Sea. At least two other ships with Israeli links have been forced to change their routes since the hijacking, according to Lloyd’s of London.
Levine says that several ships with links to Israel have been forced by current circumstances to sail around Africa, or plan to do so, rather than through the Red Sea, a route that can lengthen a voyage by two weeks and considerably add to its cost. The impact, however, is not limited to ships with connections to Israel. "There are ships with no Israeli connection that usually traverse the Suez Canal on their way from Asia to the US and Canada, and they too are considering sailing round Africa. This will make the voyage longer for them, but it should be mentioned that, because of the over-supply of tankers and the congestion in the Suez Canal, many of them sail round the Cape of Good Hope on their way to North America.
"The Israeli, or partly-Israeli, ships are reinforcing the security teams that they carry, which adds to costs," Levine adds. "Zim has even announced that it will raise the rise premium on each container by over $100. It can be presumed that this step has already led to higher shipping prices for containers on the international shipping lanes leading to Israeli ports."
According to Levine, shipping lines have become accustomed to piracy, and the Houthis’ attacks at sea in particular. In the past, these have already hit ships with Israeli, US, or Saudi connections. But attempts to keep clear of the Yemeni coast in the Bab el-Mandeb Strait are bound to fail, since the Houthis have advanced maritime capabilities, including a helicopter fleet and a naval commando. Levine says that the international forces combatting piracy in the region under the UN will not intervene in this case, since it is a matter of a political conflict.
Published by Globes, Israel business news - en.globes.co.il - on November 27, 2023.
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