The East Africa Community bloc should expect a drastic fall in business due to growing incidences of ships hijacking by the Yemen Houthi rebels.
Intelligence information indicates that Yemen’s Houthi rebels have stepped up attacks on ships travelling through the Red Sea to the western end of the Indian Ocean and this has direct negative consequences on business in EAC.
Details indicate that ships carrying some of goods and products destined to the EAC ports, 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.
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.
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.
Houthi rebels said the are hijacking ships with connection to Israel and would continue to target ships in international waters that were linked to or owned by Israelis until the end of Israel’s campaign against Gaza’s Hamas rulers.