February 29, 2024

CMA CGM Will Resume Some Red Sea Transits as Houthis Threaten “Surprise”

French shipping major CMA CGM reports it once again is going to attempt some transits through the southern Red Sea after the group twice suspended the route due to security concerns. The advisory to customers came shortly before the leader of the rebel movement renewed his threats on shipping and other major shipping companies reiterated their intent to continue to avoid the region.

“The CMA CGM Group has reevaluated the situation in the Southern Area of the Red Sea and the evolving conditions allow us to resume transit on a case-by-case basis,” the group wrote in a customer advisory released on February 28.

The move comes days after the French navy joined with the European Union which is launching EUNAVFOR Aspides, a defensive operation in the Red Sea, Gulf of Aden, and the surrounding region.

France has been operating a warship in the area since December and previously CMA CGM reported its vessels were making the transit only when they were escorted. The French group said that waiting for the escorts and the situation in the region was disrupting its schedules and then suspended all sailings after a vessel it charters was targeted.

In addition to France, Denmark and Germany both have frigates now operating in the area. Greece is also sending a vessel and was placed in charge of the operation in an agreement among the European ministers.

CMA CGM wrote to customers, “The situation is being closely assessed for each vessel before each transit, routing choices, therefore, cannot be anticipated or communicated. Otherwise, all other vessels are rerouted via the Cape of Good Hope.”

The Houthis however reiterated the general threat on shipping today while analysts note the attacks appear more widespread. They have gone beyond the original assertion that they would only interrupt Israeli shipping and later assets linked to the U.S. and UK in retaliation for the strikes by those countries in Yemen.

“Our operations will continue with greater effectiveness in the Red Sea,” said Abdul-Malik al-Houthi, the self-declared leader of one of the largest factions. Speaking in a broadcast address today he said, “We have a big surprise that the enemies do not expect, and we will indeed start it.”

These continuing threats and the general instability have led most operators to continue to reroute all vessels. Lars Barstad, Chief Executive Officer of tanker operator Frontline addressed the situation today during a call to investors. He cited what he believes are the random nature of the attacks noting that even Russian-linked vessels appear now to be targets.

“This is a proper mess and creates extremely unsafe conditions,” said Barstad. In the presentation to investors, they wrote that the “Bab El-Mandeb straits between Yemen and Djibouti are unsafe for passage for responsible owners.” 

Barstad reiterated that Frontline would continue to reroute all its vessels from the region noting that tanker traffic in the Suez Canal is down 40 to 50 percent. He said it would be higher except for the exports from the region such as Saudi Arabia in the northern portions of the Red Sea. Barstad believes traders are still factoring in the costs and impact of the diversions into the overall market.

The allied effort to combat the Houthi threat is operating on a continuous basis, with preemptive strikes and shootdowns reported daily. Late Thursday, U.S. forces destroyed six Houthi anti-ship missiles on the ground and shot down one UAV. All posed an “imminent threat to merchant vessels and to the U.S. Navy ships in the region,” according to U.S. Central Command.

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