Rough waters: Yemen rebel attacks affect East African shippers

 

East African ports should expect slower business in the coming days after Yemen's Houthi rebels stepped up attacks on ships travelling through the Red Sea to the western end of the Indian Ocean.

That means traders using the ports of Mombasa and Dar es Salaam, for example, could face higher costs as shipping lines avoid the shorter route to avoid attacks by the Iran-backed Yemeni rebels.

The uncertainties have emerged at a sensitive time for car dealers in Kenya, who have until December 31 to import vehicles whose year of manufacture is older than 2016.

Sources told The EastAfrican that two ships carrying some of the Kenyan vehicles have been diverted to take a longer route, which could take an extra 13-14 days.

Major shipping companies have been forced to divert ships from the Red Sea and Suez Canal to the Cape of Good Hope at the southern tip of Africa instead, increasing the cost of cargo on board.

Gilbert Lagat, CEO of the Shippers Council for Eastern Africa (SCEA), said members expect cargo destined for the region's ports to be affected because they rely on transshipment.

“The return of containers and our exports will be delayed. But for imports, the supply chain will be affected for transshipment since most of the mother ships pass through the channel (in Yemen) to other ports where medium vessels pick cargo to Mombasa and Dar es Salaam ports,” he said.

For car dealers, any delay in arrivals means old cars will be shipped out of the country as the Kenya Bureau of Standards (KEBS) has already issued warnings and guidelines under the eight-year rule that bars older cars from entering Kenya.

The Car Importers Association of Kenya (CIAK) confirmed that they are in a race against time to beat the eight-year rule window. Traditionally, end-of-year festivities drive up car imports.

“We have many importers bringing in more cars this month of December to comply with the eight-year-rule. We hope they will arrive on time,” said CIAK chairman Peter Otieno.

“We are racing against time so that traders with 2016 registered vehicles are not locked out, leading to losses [running into] millions of shillings.”

The eight-year rule already caught up with importers in 2014, when more than 2,000 used cars registered beyond eight years were banned from entering the country. For newer cars, buyers may still pay more to cover the cost of longer routes.

The war between Israel and Hamas, which began on October 7, has already sent shockwaves through the region and threatened to spark a wider conflict. The Houthis, backed by Iran, which also supports Hamas, say they are supporting Palestinians under siege by Israel in the Gaza Strip. They have waded into the Israel-Hamas conflict by attacking ships in vital shipping lanes and even firing drones and rockets at Israel.

Most of the Houthi attacks have targeted ships with links to Israel, including several with ownership links to the Ofer family, one of the world's most powerful shipping dynasties.

On Monday, US Defense Secretary Lloyd J Austin III announced Operation Prosperity Guardian, a naval operation to defend ships.

“This is an international challenge that demands collective action,” he said of the Houthi attacks.

“Operation Prosperity Guardian is bringing together multiple countries, including the United Kingdom, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain, to jointly address security challenges in the southern Red Sea and the Gulf of Aden, with the goal of ensuring freedom of navigation for all countries and bolstering regional security and prosperity.”

Maritime piracy is not a new problem for the countries of the western Indian Ocean. A decade ago, ships plying these waters were required to take out insurance as Somali pirates carried out attacks for ransom. A multinational naval operation led by the European Union helped end the threat.

But with Yemen, major shippers including Hapag Lloyd (HLAG.DE), MSC and Maersk (MAERSKb.CO), oil major BP (BP.L) and tanker group Frontline (FRO.OL) have said they will bypass the Red Sea route and reroute through southern Africa's Cape of Good Hope.

About 15 per cent of the world's shipping passes through the Suez Canal, the shortest route between Europe and Asia and other African countries in the western Indian Ocean belt.

This week, Denmark's Maersk suspended all container shipments through the Red Sea after a "near-miss" involving its vessel Maersk Gibraltar.

Data from shipping apps showed that at least 11 container ships that had passed through Suez were now anchored in the Red Sea between Sudan and Saudi Arabia. They were approaching Yemen with consumer goods and grain bound for countries including Singapore, Malaysia and the United Arab Emirates. Ships usually pay a fee to pass through the Suez Canal.

By Anthony Kitimo