A senior official from the Cyprus Shipping Chamber (CSC) has raised concerns about ongoing attacks by the Houthis in the Red Sea, warning that the disruptions in supply chains could surpass the impact of the COVID-19 pandemic.
In statements to the Cyprus News Agency (CNA) Thomas Kazakos, the Director General of CSC, emphasised the vulnerability of island-states like Cyprus, where 98% of trade relies on maritime transport.
Following the conflict between Israel and Hamas, the Houthis intensified attacks on Red Sea shipping, initially targeting vessels linked to Israeli interests. However, Arsenio Dominquez, the new Secretary-General of the International Maritime Organisation (IMO), noted that the attacks have broadened to affect shipping in general.
In response to the escalating situation, eighteen major shipping companies, including industry giants like Maersk, Hapag-Lloyd, and MSC, have announced the suspension of their use of this shipping route, accounting for approximately 15% of global trade.
“For us what’s at stake is the unhindered passage of commercial shipping vessels,” Kazakos said, noting that shipping does not only carry consumer products but also vital items such as fuel, grain, iron and pharmaceuticals, the absence of which “could bring huge consequences to economies, apart from inflationary pressures.”
Moreover, Kazakos outlined the repercussions of rerouting ships from the Suez Canal, a crucial shipping lane connecting Asia to Europe. Such rerouting would result in serious delays, increased fuel consumption costs, delivery time setbacks, and heightened freight expenses, he added.
“This would have a chain reaction with expected significant price hikes and commentators have suggested the impact will be worse than the increase in freight rates during the COVID-19 pandemic,” he explained.
Responding to a question about the efficacy of armed guards on vessels, Kazakos dismissed the idea as a solution, pointing out that Cyprus had previously legislated the carrying of weapons during the piracy period in the same region. However, with current attacks involving the use of drones, he stressed the need for international support.
“The outcry by the international shipping family is a given, we all stress the need for powers to engage. For us the message is clear, the international community is obliged to provide support and protect world trade which by 90% relies on global shipping,” he said.
The Iran-aligned Houthis of Yemen are playing an escalating role in the conflict in the Middle East, attacking shipping in the Red Sea and firing drones and missiles at Israel in a campaign they say aims to support Palestinians in the Gaza war.
The Houthis’ role has added to the conflict’s regional risks, threatening sea lanes through which much of the world’s oil is shipped, and worrying states on the Red Sea as Houthi rockets and drones fly towards Israel.
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