4 January 2024 (Lloyd's List) - RED SEA activity is down about 20% after major container lines suspended operations in response to Houthi attacks.

In November, on average 386 vessels were active in the Red Sea each day. Between December 25 and 31, 2023 there was a daily average of 315 vessels sailing in the Red Sea, according to Lloyd's List Intelligence data.

This figure was 385 over the same week period in 2022. (Only cargo-carrying vessels over 10,000 dwt, those that are most likely to be trading internationally, that were not berthed or anchored were considered for this analysis.)

The decrease in activity is largely driven by containerships which started to pull out of the Red Sea in the second last week of the year.

Maersk, Mediterranean Shipping Company, Hapag-Lloyd and Evergreen and are diverting vessels around the Cape of Good Hope. 

Passes around the Cape of Good Hope increased 27% in the last week of December when comparing to the week prior, according to Lloyd's List Intelligence data.

Some 131 containerships sailed via this route between December 25 and 31, up from 35 over the same period last year and 51 during the week running December 18 to 24.

Boxships have been targeted in half of the known attacks on commercial shipping.

It is not certain why containerships are being disproportionately affected, but security analysts say it is a combination of the Houthis trying to strike the most effective targets while not stoking regional tensions.

Control Risks director Cormac Mc Garry said: "Containerships represent trade the Houthis are trying to block from Israel, it is the containerised traffic they want to disrupt. Further, targeting tankers trading Gulf Arab oil and gas would not bode well for the Houthis."

Boxships accounted for 40% of Israel's non-domestic seaborne arrivals, in terms of sheer volume, in 2023.

In mid-December, Evergreen and OOCL stopped accepting Israeli cargos.

Maersk and MSC continue to call at Israeli ports.

Containership arrivals into Israel were down 11% and 16% year-on-year in November and December, respectively.

While worsening Houthi attacks have pushed major container lines to halt Red Sea navigation, changes to activity levels for tankers and bulk carriers is negligible.

This comes downs to the risk appetite of shippers.

Mc Garry said: "Shipping is very risk tolerant. As long as trade can be done, shippers find way to move it and many will see it as a business opportunity to seize higher rates or edge in on competitors that are less risk tolerant."

It is likely that some shippers are also taking the Houthis at their word when they say the Red Sea is safe for international trade.

While it has been difficult to establish direct links between some of the attacked ships and Israel, analysts say the attacks are not random.

EOS Risk Group head of advisory Martin Kelly said: "The Houthis are calculated and generally speaking there is a method to their madness. The target profile has changed and vessels with even subtle links to Israel are at risk, but this is not an attack against maritime trade."

US Central Command says the Houthis have launched 24 attacks against commercial shipping since November.

There continues to be a risk of collateral damage for vessels that are not direct targets.

A US-led coalition of 13 nations has warned the Houthis that there will be "consequences" if they do not stop their attacks in the Red Sea.

The Houthis started attacking Israel-affiliated vessels in November in support of Hamas.

Any strikes against Yemen could cause the situation to escalate.

Mc Garry said: "There are two directions this can go. Israel alleviates it war in Gaza and there is a proportionate drawdown from the Houthis, or the US launches airstrikes against Houthi targets in Yemen. The latter carries the risk of spiralling into further regional escalation, precisely what the US has been trying to avoid."