Houthis roll out new tactics in the Red Sea: Yemen’s Houthis detonated an unmanned surface vessel (USV) in the Red Sea on Thursday in a renewed escalation to attacks on shipping lanes, the Financial Times reports. The denotation was the Houthi’s first deployment of a USV, and while no ships were damaged, the introduction of USVs represents a “concern”, the FT cites US Vice Admiral Brad Cooper as saying. Houthi-led attacks against shipping vessels in the region have pushed major carriers to halt transits across the Red Sea.

Tensions are coming to a head: The latest attack came only one day after the US and its allies issued a joint statement warning the group to halt attacks or face consequences. The communique saw the governments of the the United States, Australia, Belgium, Canada, Denmark, Germany, Italy, Japan, Netherlands, New Zealand, Korea, Singapore, and the United Kingdom condemn Houthi-led attacks against shipping vessels as a threat to lives and the global economy, indicating there will be repercussions unless the attacks cease. The UN Security Council has also called for the attacks to stop, urging the Houthis to release Japanese operated cargo ship Galaxy Leader and its crew, which the group had seized on 19 November, Reuters reported last week.

Iran has also upped its saber rattling: Iran has vowed to reach the “enemy,” Reuters cited Iran’s Revolutionary Guards commander Hossein Salami as saying. Although Salami did not explicitly identify Iran’s enemy, his statements came during a ceremony where Iran’s Revolutionary Guards Navy unveiled a new warship and missiles.

The disruptions have so far been a boon for global carriers: Danish shipping giant Maersk and Germany’s Hapag-Lloyd have seen their market value boosted by some USD 18 bn since mid-December, as Houthi-led attacks drove a surge in freight rates, Reuters reported last week. Increased transit times and higher risk saw Asia to Europe forty-foot equivalent unit (FEU) containerized shipping rates nearly double to USD 4k, seeing carriers rake in windfall gains, the newswire wrote, citing Freightos data. Nevertheless, weaker demand from China and the rest of the world and international efforts to open the waterway will likely see the boom lasting only a limited time, the newswire said.

Disruptions are affecting retailers and ports: Retailers are set to face delays due to the disruptions, with major suppliers such as Ikea, Amazon, and Walmart reliant on the Suez route, Reuters reported separately on Thursday. The port of Rotterdam, Europe’s largest, anticipates a 1.25 mn tonnes decline in cargo throughput for December 2023 due to ship reroutes and delays, the port said in a statement. Nonetheless, the decline is minimal compared to the port’s total volumes which were 467 mn tonnes in 2022, the statement said.

Air freight may step in to fill the gaps: Although there air freight has yet to see any upshots from Red Sea disruptions, there is likely to be some transition to air freight if the situation persists, according to a WorldACDreport. The last two weeks of 2023 saw a 5% y-o-y in air freight tonnage, the report said.

ALSO-Somali pirates have also been more active: Five to six armed men boarded Liberian-flagged bulk carrier Lila Norfolk 460 nautical miles off Somalia’s coast in an apparent hijacking attempt, Reuters reported on Friday. The gunmen abandoned their attempt when the Indian navy responded with a warship, the newswire said. Pirate attacks in the area have resumed after a 6-year hiatus. Pirates in the region have become emboldened after the US-led anti-piracy coalition began diverting its attention to countering the Houthi threat, the newswire said citing experts.

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