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Since the end of 2023, attacks by Yemeni Houthi rebels on merchant ships near the Red Sea have caused disruptions to international shipping traffic. The passage through the Suez Canal, which is one of the most important sea routes between Europe and Asia, has been particularly affected. In this interview, Tobias Brandt and Yannick Böttcher of NOSTA Sea & Air explain the consequences of the current situation.
Tobias, what is currently happening in the Red Sea?
Tobias Brandt (COO Sea & Air GmbH): The situation in the Red Sea has worsened drastically since the end of 2023. Since November, there have been numerous attacks on merchant shipping in the Strait of Bab al-Mandab, using missiles and drones as well as helicopters. Fortunately, there have been no casualties among the ship crews so far, but 25 sailors are currently being held captive by the Houthi rebels. The attacks on merchant shipping have not yet been stopped or contained.
In addition to the threat posed by the Yemeni rebels, there has recently been an increase in pirate attacks along the Horn of Africa. Although the attacks are not directly linked to the Houthi rebels, most of the warships are located close to the Yemeni coast and therefore allowed the local pirates room to maneuver in the Indian Ocean.
How is the global community reacting to the situation?
Yannick Böttcher (Ocean Carrier Manager): As part of the US-led Operation Prosperity Guardian, warships and military personnel were deployed to the region to bring the situation under control. In addition to this US mission, there are other international missions involving efforts by the UK, France, India, Iran and Germany to establish a presence in the region with their own ships. Whether China will also intervene at sea remains to be seen.
What happened to cargo that was already en route in the Red Sea at the time of the first attacks in November and December?
Yannick Böttcher: In many cases, the shipping companies were able to invoke the internationally applicable force majeure clause and therefore passed on additional costs to customers. In some cases, containers were unloaded from the ship at an unscheduled port in accordance with this clause and only transported further in exchange for additional payment.
Apart from the longer transit time, what are the consequences for our customers?
Tobias Brandt: Higher costs. There are several reasons for this. Firstly, there is the time of year: the extensions came almost at the same time as the annual shortage of cargo space before and after the Chinese New Year. This led to a drastic increase in sea freight rates. Connections between the Far East, the Indian subcontinent, the Middle East and Europe are particularly affected by this.
There were also rate increases in shipping across the Atlantic, as there was initially a lack of capacity here. We expect demand to fall towards the end of the first quarter in March, which should at least ease this shortage.
In the medium term, however, rates are likely to settle at a higher level. Even if shipping companies route their ships through the Suez Canal again, insurance costs will rise considerably. Shipping companies will pass these costs on to their customers.
What specific measures has NOSTA taken in this situation?
Yannick Böttcher: In a scenario like this, precise and reliable knowledge is very important. That is why we informed our customers about the situation and its immediate consequences as transparently and promptly as possible. This was particularly vital at the beginning, when the news situation was still very challenging for everyone involved. Ultimately, this interview is also part of this open communication policy.
As far as specific transportation options are concerned, we do of course suggest land-based alternatives to our customers. We are well networked in intermodal transport and can point to a real time advantage over sea transport. For imports from China to Europe in particular, there are now ways to circumvent the war in Ukraine.
Last question: How will NOSTA deal with situations like this in the future?
Tobias Brandt: We will continue to inform our customers as specifically and promptly as possible about challenges in the global logistics market. We will also continue to focus on finding and implementing pragmatic solutions together with our customers.
Tobias and Yannick, thank you very much for the interview.
In this video, Tobias Brandt and Yannick Böttcher answer the three most important questions about the current situation surrounding the Suez Canal.
