The Daily View: Let’s not get carried away

A FEW in the industry have been making some louder noises than usual about the potential of a return to the Red Sea.

Some, like the Suez Canal Authority, have been more vocal than others. And can you blame them?

The authority saw its revenue fall by $6bn last year thanks to the rerouting of shipping around the Cape of Good Hope. They probably can’t afford for this sorry saga to go on for too much longer.

Their claim that Maersk would be returning to the canal this month were cut short by the line itself, who clarified in a statement they would be making a return as soon as conditions allowed.

All of this is to say that talk of a return is most likely based on sentiment, rather than a material change in circumstances.

The Houthis have told Hamas they’ll only start bombing ships if Israel breaks the ceasefire (and who can you trust if not the Houthis). Their inactivity has prompted a few to wonder if a return may be possible sooner rather than later.

Lloyd’s List Intelligence data does show that a tepid return is underway. Transits through the Bab el Mandeb were at their highest level in two years last month. But we’re still talking a 50% drop in traffic from pre-exodus levels.

Norden chief executive Jan Rindbo still needs to see more before he decides that it’s safe to send his vessels and seafarers through the shortcut.

Chief among his concerns is the volatility of the region. You can send a vessel through the Mediterranean with one scenario in mind, only for that to have completely changed by the time the ship actually gets to Suez.

Last week’s attack on the bulk carrier Bobik(IMO: 9317781) is evidence of that. The truth is this is more likely to be disgruntled fishermen than it is the Houthis, but small arms fire was still exchanged between the 15 skiffs that made the approach and the bulker’s armed security team.

A reality check perhaps. This is still a dangerous part of the world to sail an unarmed vessel through, and let’s not forget that we’re only six months on from the sinking of Magic Seas(IMO: 9736169) and Eternity C.(IMO: 9588249). The latter’s crew was only just released from Houthi captivity this week. Four of their colleagues will never be reunited with their families.

At this week’s Outlook Forum in London, we’ll be revealing the results of our industry-wide poll, during which we asked when a return to the Red Sea was most likely.

I won’t spoil the results for you, but it’s safe to say it isn’t next week.

Things have moved in the right direction these past few months, there’s no doubt about it. But we may just be getting a little bit carried away.

The decision makers still need a bit of convincing.

Joshua Minchin
Senior reporter, Lloyd’s List

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