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Red Sea tipping point may be ‘only a few more attacks away’

Shipowners say many are already shunning Red Sea as risk to crews rise

At this moment, charterers and crews are also having a say in whether a ship runs the Houthi gauntlet or not

SHIPOWNERS are having to constantly retune themselves to the degree of risk from indiscriminate firing on commercial shipping in the Red Sea by Yemen’s Houthi faction, with charterers, crews and type of ship among the host of factors influencing decisions. 

While some owners are, in the words of one senior dry bulk shipowner, “staying well away from the whole area,” other owners believe that the tipping point has not yet arrived, but may only be a few more attacks away.

At that point, vastly more ships would join the many already treating the region as a no-go area, industry players hypothesise.

Greece-based owner Harry Vafias said that his group’s tankers and bulk carriers are, for the moment, continuing to voyage through the Red Sea but the group is already reluctant to expose its gas carriers to the added risk.

“Things may change very fast,” he said. “If there are three, four, five more attacks, or one of the hits causes a lot of damage or pollution, I think you will see owners staying away.

“We already know of cases where the owner is prepared to send the vessel, but the crew does not want to go and you can’t do anything about that,” Vafias said.

Sentiment among charterers was also changing. “Charterers last week were much stricter about not wanting to divert, but after the latest attacks some have become less reluctant,” he said.

Haralambos Fafalios, chairman of the London-based Greek Shipping Co-operation Committee, said that the majority of the GSCC’s members, as well as many other Greek owners, were now “making every effort” to avoid the Red Sea.

“There is no reason why they [the Houthis] should hit a Greek ship,” he said, “but unfortunately at the moment it is a big risk.”

However, he added, “it is not always a given that charterers always share our view.”

Another senior owner told Lloyd’s List that re-routing vessels around the Cape of Good Hope was “significant because of the tonne-mileage it soaks up, but it is not necessarily such a big commercial hit when you factor in things like increased cargo and vessel insurance” for going through Suez, he said.

He also expected crews to demand additional danger money in certain situations, while some charters would likely begin paying premium rates to transit the Red Sea.

To his knowledge, however, neither trend is yet widespread in the market.

It was “awful that merchant vessels and their crews are being used as pawns,” but “remarkable” how little damage vessels hit so far appear to have sustained, although damage reports from the most recent incidents were still awaited.

“Unless they are hit at a very specific point, today’s merchant vessels are incredibly robust,” the industry source said. But this was not to deny the grave risks vessels and their crews were running, he added.

“This turmoil will be particularly bad for the container sector as their sea-bridge depended on the canal.”

For dry bulk, certain eastbound cargoes probably faced more disruption than westbound cargoes, he said.


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