Attack on Maersk Detroit underscores continued Houthi threat

Attack on Maersk Detroit took place 50 nautical miles south of Al Mukha, Yemen. [Image: UKMTO]

This morning brought news from UKMTO of an incident 50 nautical miles south of Al Mukha, Yemen, in which the master of a ship reported an explosion about 100 meters off the vessel’s starboard side. According to a later post on X (formerly Twitter) by U.S. Central Command that ship was the U.S.-flagged, owned, and operated Maersk Line Limited containership M/V Maersk Detroit.

CENTCOM says that at approximately 2 p.m. (Sanaa time), Iranian-backed Houthi terrorists fired three anti-ship ballistic missiles from Houthi-controlled areas of Yemen toward the Maersk Detroit. One missile impacted in the sea. The two other missiles were successfully engaged and shot down by the USS Gravely (DDG 107). There were no reported injuries or damage to the ship.

According to a Bloomberg report, Maersk said that the Maersk Detroit and another Maersk Line Limited ship, Maersk Chesapeake, were due to transit through the Bab el-Mandeb strait, when both ships reported seeing explosions close with the U.S. Navy ships escorting them intercepting multiple projectiles. The U.S. Navy turned both ships around and is escorting them back to the Gulf of Aden.

While, as U.S.-flagged vessels, Maersk Detroit and Maersk Chesapeake were clearly on the Houthi hit list, the Iranian-backed group’s attacks on ships have had an ongoing impact across the entire shipping spectrum … despite ongoing efforts both to protect merchant shipping through Operation Prosperity Guardian and to take out Houthi capabilities inside of Yemen.

Most recently efforts to degrade Houthi capabilities have included an action at 2.30 a.m. this morning (Sanaa time) when CENTCOM forces conducted strikes against two Houthi anti-ship missiles that were aimed into the Southern Red Sea and were prepared to launch. The missiles were destroyed, says CENTCOM. That strike came after a January 22 initiative that saw CENTCOM forces alongside U.K. Armed Forces, and with the support from Australia, Bahrain, Canada, and the Netherlands, conduct strikes on eight Houthi targets that included missile systems and launchers, air defense systems, radars, and deeply buried weapons storage facilities.

Pentagon press secretary Maj. Gen. Pat Ryders said, at a press briefing yesterday, that “since January 11, “we’ve assessed that we’ve destroyed or degraded over 25 missile launch and deployment facilities, more than 20 missiles plus we’ve struck unmanned aerial, vehicle, coastal radar and air surveillance capabilities, as well as weapon storage areas with good effects.”

FREIGHT RATES SOAR

Those ”good effects” have yet to calm shipping nerves. Yesterday, even before the Houthi attack on Maersk Detroit, freight rate benchmarking and market analytics platform Xeneta said that early indications suggest ocean freight shipping rates are set to increase further in early February amid the ongoing Red Sea crisis

The Xeneta projection is based on rates already received from customers for the first week in February.

• From the Far East to Mediterranean, market average short term rates are set to increase 11% by February 2, to stand at $6.507 per FEU. This is an increase of 243% since the Red Sea crisis escalated in mid December.
• Rates from the Far East to North Europe are set to rise by 8% by 2 February, with a market average of $5,106 per FEU. This is an increase of 235% since mid December.
• The biggest increase in rates is from the Far East into the U.S. East Coast, says Xenata. On this trade, the newly-released data suggests an increase of 17% by February to bring the average short term rate up to $6,119 per FEU. This is an increase of 146% since mid December.

“Carriers are trying to readjust services to make up for the additional sailing time around the Cape of Good Hope. For example, they are cutting journeys short, missing port calls and increasing sailing speed,” commented Xeneta chief analyst Peter Sand. “However, despite this, the early data from Xeneta suggests rates will continue to rise as we head into February.”

TANKER MARKET

Not only U.S.-flag ships like Maersk Detroit (or containerships in general) are affected. Shipbroker BRS this morning looked at the potential impacts on the tanker market and said that “the situation appears to be rapidly deteriorating rather than improving. This is now starting to lead to tanker rerouting and it appears that this will become more widespread going forward.”

“Following the start of the attacks on shipping in early December, there was a widespread rerouting of container liners away from the Red Sea and Suez Canal with ships taking the longer route around the African Cape,” notes BRS. “However, we tentatively suggest that this was less about security as the rerouting also provided support to the container liner market which was then in a slump. Accordingly, freight rates for container liners have since surged. LNG carriers, notably those controlled by Qatar, ha ve also since taken the decision to reroute via the African Cape.”

“At the beginning of the year,” says BRS, “only Israeli-linked tankers were avoiding the region, with these owners seemingly preferring to either undertake voyages which do not require transit through the Red Sea or rerouting their laden and ballast ships around the African Cape. However, since the U.K. and U.S. military action, and against the expectation that the Houthis will now additionally target ships which are linked to the U.K. and U.S., U.K.-listed international oil major Shell which controls 245 tankers, has stated that it will not undertake voyages through the Red Sea. It seems likely that other companies linked to the U.K. and U.S. will follow suit, either officially or unofficially. Indeed, there have also been statements from other shipowners, notably Denmark-based (but U.S. and Denmark-listed) Torm who control a fleet of 88 tankers, that they will avoid the Red Sea until further notice.”

BRS says that, while it still currently appears that the tanker market is taking a wait and see approach, “over the past week there has been a steady increase in the number of laden tankers heading from east to west rerouting via the African Cape rather than taking the Suez Canal. Indeed, shipping data suggest that many of these were ships which were seen dawdling around the Middle East which at the beginning of the week. Broker information suggests that many owners are unwilling to fix ships on routes via Suez and are specifying that routes have to pass via the cape. Accordingly, transits through the Bab al-Mandab Strait have slowed to a trickle. Considering the rapidly escalating situation, we anticipate that there will more and more rerouting via the African Cape of tankers both laden and in ballast over the coming days and weeks. Despite continued advice from shipping groups to avoid the Bab al-Mandab Strait, there continue to be tankers willing to transit, with some of these taking to a variety of channels to advertise their lack of links to Israel. Some transits have involved ships already undertaking voyages before last Friday’s events where the charterers have stated that any rerouting away from Suez would be paid for by the owner or that the cargo delivery is date specific. Meanwhile, reports also suggest that some owners are being offered premiums to go via Suez. Impact of rerouting on tanker ton miles Once those tankers which were already laden and enroute before January 12, and cannot reroute via the Cape due to the reasons outlined above, have passed Bab al-Mandab, we anticipate that tanker traffic through the strait will slump. Such widespread rerouting will provide a significant injection of ton miles to tanker markets.”

BRS notes that an “increase in voyage times would tighten tonnage and propel hire rates significantly higher” and that “the economics of rerouting via the Cape are improving all the while.”

Much more in the full BRS assessment. Read it HERE