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Red Sea Crisis

The latest news and commentary on how the conflict in the Middle East is affecting the global maritime industry and shipping markets.

Attacks on Red Sea shipping bankrupt Israeli port

The economic effects of the Houthi strikes against Red Sea shipping became evident with the Port of Eilat’s request for financial assistance from the Israeli government following an 85% decline in volumes.

Nick Savvides, Europe correspondent

July 10, 2024

2 Min Read
2048px Eilat's Harbor
Photo: Adiel lo, CC BY-SA 3.0 via Wikimedia Commons

Eilat is situated on Israel’s southern coast on the Red Sea, linking the country to Asia and the Indian Ocean without the need to transit the Suez Canal, but its volumes had been in decline since a Q4 2022 spike saw the facility handle 124,000 tonnes, doubling its Q1 levels that year.

However, in a meeting with the Knesset’s Economic Affairs Committee on 7 July, CEO Gideon Golbert said there had been no activity at the port for eight months and no revenues coming in.

The port mainly handles bulk cargoes, potash and car imports as well as some containers is considerably smaller than the country’s Mediterranean ports of Ashdod and Haifa, but the effects of the Houthi attacks have clearly affected the Israeli trade.

On a broader scale the Houthi actions have diverted hundreds of container vessels every week on a much longer journey, some 4,000 miles longer, around the African cape to Europe, increasing the fuel costs, and emissions, with the first increment of the EU ETS introduced in January this year.

Conversely the Middle East conflict has given a significant boost to the secondhand container ship market, reports Alphaliner.

“Container sale and purchase deals surged again in the first half of 2024, as carriers and NOOs reacted to the red-hot charter and freight markets. After a slump in transactions in the second half of 2023, more than half a million teu of container tonnage changed hands in the first six months of 2024,” said the analyst.

Related:Red Sea diversions hit Greece container volumes

As vessel operators “sought every available ship” in order to effectively meet the demand for the services travelling around the Cape of Good Hope and to maintain weekly schedules.

According to Alphaliner 141 ships of 572,600 teu were traded between January and June, an average of 23 units per month, compared to 15 sales per month H2 2023.

Carriers initially believed that the disruption to Red Sea shipping would be short lived and did not respond immediately to the surge in rates in late 2023.

“Despite the influx of a massive 1.6 million teu in newbuilding capacity in the first half of 2024, carriers sought even more tonnage in the second-hand market in order to plug schedule holes and capitalise on firm rates.”

Alphaliner also reported that virtually every available ship is now deployed in gainful employments with the idle fleet falling to 0.4% in May, and, while the idle container fleet increased minimally over the last six weeks, the number of unemployed ships remains below 1% of the total fleet.

About the Author

Nick Savvides

Europe correspondent

Experienced journalist working online, in monthly magazines and daily news coverage. Nick Savvides began his journalistic career working as a freelance from his flat in central London, and has since worked in Athens, while also writing for some major publications including The Observer, The European, Daily Express and Thomson Reuters. 

Most recently Nick joined The Loadstar as the publication’s news editor to develop the profile of the publication, increase its readership and to build a team that will market, sell and report on supply chain issues and container shipping news. 

This was a similar brief to his time at ci-online, the online publication for Containerisation International and Container News. During his time at ci-online Nich developed a team of freelancers and full-time employees increasing its readership substantially. He then moved to International Freighting Weekly, a sister publication, IFW also focused on container shipping, rail and trucking and ports. Both publications were published by Informa. 

Following his spell at Informa Nick joined Reed’s chemical reporting team, ICIS, as the chemical tanker reporter. While at ICIS he also reported on the chemical industry and spent some time on the oil & gas desk. 

Nick has also worked for a time at Lloyd’s Register, which has an energy division, and his role was writing their technical magazine, before again becoming a journalist at The Naval Architect for the Royal Institution of Naval Architects. After eight successful years at RINA, he joined Fairplay, which published a fortnightly magazine and daily news on the website.

Nick's time at Fairplay saw him win the Seahorse Club Journalist of the Year and Feature Writer of the Year 2018 awards.

After Fairplay closed, Nick joined an online US start-up called FreightWaves. 

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