Red Sea returns not enough to move dial on traffic volumes
- Red Sea chokepoint transits tumble to record low in February
- Some companies that paused Bab el Mandeb transits at the start of the conflict are resuming voyages
- Majority of owners and operators that diverted continue to avoid the area with a ‘wait and see’ approach in place
Approximately 160 ships have started or resumed Red Sea voyages
SHIPOWNERS and operators are certainly returning to the Red Sea, but this activity has had a negligible impact on total traffic with transits through the Suez Canal and Bab el Mandeb hitting fresh lows in February.
Since the Houthis’ partial lifting of Red Sea restrictions, following the implementation of the Israel-Hamas ceasefire on January 19, some 159 distinct cargo-carrying vessels have either resumed transits through the Bab el Mandeb or started passing through the strait having no history of doing so during the period of heightened tension and uncertainty.
The latter is more commonly seen.
These vessels represent 16% of the total number of ships sailing through the Bab el Mandeb over the past six weeks. They account for 186 of the 1,309 voyages recorded during this time.
Bulk carriers and tankers are driving the renewed interest in the beleaguered shipping lane.
While some companies have reassessed their risk since mid-January and adjusted accordingly, the Cape of Good Hope remains the preferred option for the vast majority that diverted in the early days of the conflict.
“I think it is a bit of a wait and watch approach,” Standard Chartered global head of shipping finance Abhishek Pandey said during a panel at Marine Money at the end of January.
“Nobody is in a rush to say, okay, fine, the routes are open — let’s go. I think it will take some time.”
Shipping’s hesitancy to commit to a Red Sea return is borne out by the data on traffic volumes.
Transits through the Bab el Mandeb and Suez Canal did not grow between January and February, instead falling 11% and 21% respectively.
However, it is possible that seasonality had a role to play in the decrease in traffic levels.
During the same period in 2023 Bab el Mandeb transits were down 11% month on month and Suez down 13%.
Volatility in the region means it is unlikely that owners and operators will abandon their cautious approach in the near future.
Not only is the Gaza ceasefire fragile, but the designation of the Houthis as a terrorist organisation by the US could escalate the security situation.
BIMCO chief security officer Jakob Larsen said: “With the increased likelihood of attacks on the Houthis, the uncertainty surrounding the Gaza ceasefire, bottom line is, however, that the security threat is increasing and the associated risk to merchant ships goes up a notch.”
