The Red Sea poses a significant challenge for shipping companies. They are caught between the risk of Houthi missile attacks when passing through the Suez Canal and the added expense of circumnavigating the Cape of Good Hope.They are caught between the risk of Houthi missile attacks when passing through the Suez Canal and the added expense of circumnavigating the Cape of Good Hope. With higher insurance premiums or increased fuel costs, these expenses are ultimately passed on to consumers, potentially contributing to inflationary pressure. Disruptions in transit routes have already affected companies like Tesla, Michelin, and Volvo, leading to production delays and shortages. The threat from Houthi attacks complicates risk mitigation efforts, with ships resorting to tactics like manipulating their Automatic Identification System (AIS) data.
However, altering AIS signals may inadvertently increase the likelihood of being targeted by making vessels appear more hostile. Despite attempts to signal neutrality or protection, such strategies offer uncertain effectiveness against Houthi attacks, which present a different risk profile compared to historical piracy threats. The dynamic nature of the situation in the Red Sea region underscores the challenges faced by shipping operators, prompting some vessels to either avoid the area entirely or operate with AIS equipment switched off to evade detection.
Source: Hellenic Shipping News