Japan’s three major shipping firms become latest to suspend Red Sea routes due to Houthi


Japan‘s three major shipping firms today said they are joining other major companies in suspending routes through the Red Sea over Houthi rebel attacks on vessels in the vital waterway.

The three firms – Nippon Yusen, Kawasaki Kisen Kaisha and Mitsui O.S.K Lines – said they suspended navigation through the Red Sea in order to ‘ensure the safety of crews’. 

‘We have suspended navigation through the Red Sea by all ships we operate,’ a spokesperson for Nippon Yusen, also known as NYK Line said.

The three shipping firms have become the latest to divert vessels from the Red Sea region, traditionally one of the world’s busiest trade routes, in a move that raises already heightened fears of price increases for UK consumers.

Marco Forgione, Director General of the Institute of Export & International Trade, told MailOnline that the Red Sea is a ‘vital route’ for Japanese goods heading to Britain. Disruption to that route could impact manufacturing and automotive industries, he said. 

Houthi rebels have increased the frequency of their attacks against Western ships in recent months (file image)

Houthi rebels have increased the frequency of their attacks against Western ships in recent months (file image) 

A missile is launched from a warship during the U.S.-led coalition operation against military targets in Yemen, aimed at the Iran-backed Houthi militia on January 12

A missile is launched from a warship during the U.S.-led coalition operation against military targets in Yemen, aimed at the Iran-backed Houthi militia on January 12 

Freight companies are having to take alternative routes to avoid the Suez Canal following attacks by militants

Freight companies are having to take alternative routes to avoid the Suez Canal following attacks by militants 

Forgione said: ‘The Red Sea is a vital route for Japanese goods heading to Britain. So many manufacturing parts which are crucial for everyday consumer goods – like the chips in our smart TVs – are imported from Japan.

‘In particular, high value components and goods for manufacturing and automotive businesses. These are supply chains that operate on a ‘just in time’ basis. So if these Red Sea suspensions persist, those sectors will be hit hard. We could even see some car manufacturers pause production, just as Tesla and Volvo announced this week.

‘It’s also important to remember that lots of Japanese manufacturing businesses have their European headquarters in the UK. So any delay in goods making their way here will have a knock-on impact across the continent as well.

‘All of this reinforces why a robust import strategy for the UK is so vital, and why the Government’s new Critical Imports and Supply Chains Strategy launched today is so important. 

‘Combined with the ongoing digitalisation of trade, this new strategy will help our manufacturers and our supply chains boost resilience at a time of growing global instability.

‘It is imperative that all businesses seek help to review their supply chains. We are moving away from the fragility of the current global supply chain system to one which will require resilience and anti-fragility.’

Since Friday, US and British forces have been bombing scores of targets inside Houthi-controlled Yemen in response to the attacks by the rebels, who say they are targeting Israeli-linked shipping in the Red Sea in solidarity with Gaza. But in reality, they are attacking any ship that is travelling through the waterway. 

The situation has heightened fears of the Israel-Hamas war flaring across the region and disrupted trade in one of the world’s key maritime commercial routes.

The waterway between Asian and European markets normally carries about 12 percent of global maritime trade but since the attacks, shippers have been forced to take costlier routes that can add weeks to delivery times. 

Vessels carrying goods from Japan and other Asian countries to Europe must now go around the southern tip of Africa rather than transit the Suez Canal, which can boost journey times by a third or more and result in a commensurate increase in fuel use and emissions.

Indeed, for shipping firms, the longer journeys can result in higher costs for vessel hire, fuel and manpower, and can often also lead to late fees for consumers that contracted deliveries by a certain date. 

‘Vessels which we operate and that were about to enter the Red Sea soon are asked to stay away from entering the Gulf of Aden’ south of the Red Sea, a spokeswoman for Mitsui O.S.K. Lines told AFP.

Kawasaki Kisen Kaisha’s spokesman Goro Kitamura said the company also ‘suspended navigation into the Red Sea since Friday, but we don’t have vessels near the Red Sea right now’.

Last month, Ocean Network Express, a container shipping business jointly set up by the three Japanese firms, said they would avoid the area.

In November, Huthi rebels said they had seized a ship owned by an Israeli businessman and rerouted it to Yemen’s coast.

The vessel is operated by Nippon Yusen, which said it had set up a task team to gather information to ensure the safety of the 25-strong crew.

As of Wednesday, however, Nippon Yusen has no fresh information on the seized ship, the spokesman said. ‘We have received no information, while we are worried about’ the fate of the vessel and its crew, he said.

More than 350 ships have already been rerouted around the Cape of Good Hope, adding ten days to journeys and costing in excess of a million dollars in additional fuel costs.

The attacks have not yet sent prices spiralling in the UK, but experts warn that households should brace for further price rises as the conflict creates supply issues and drives fuel costs up.

Britain and the United States pounded several targets in rebel-held Yemen overnight over a dramatic three-hour period. This graphic shows what the US-UK coalition used to carry out the strikes, and the timeline of the mission as according to official releases

Marco Forgione, Director General of the Institute of Export and International Trade, told MailOnline last week that CPI inflation could rise by up to four per cent if the conflict continues or escalates.

This could add 10p to the price of a block of butter, 12p to a jar of Marmite and 9p to a six-pack of eggs. A pack of 240 Pg Tips tea bags could rise by 19p to £4.98 and a four-pack of Heinz baked beans by 15p to £3.90. 

Tesco chief executive Ken Murphy said: ‘If they [shipping containers] do have to go the whole way around Africa to get to Europe, it extends shipping times, it constrains shipping space and it drives up shipping costs. That could drive inflation on some items.’ 

Goods from countries including Bangladesh, Vietnam, Thailand, Japan and Australia will be the worst affected, according to Marco Forgione, director general of the Institute of Export and International Trade. 

He said: ‘Shoppers should expect shortages in items ranging from clothing, shoes to shellfish, meat and mobile phones, cars, wine and tobacco.’ 

The price of fuel could also jump by 4p a litre in the next few days if there is a further escalation of the tensions in the Middle East, according to Simon Williams, fuel spokesman at the RAC.

A litre of unleaded petrol currently costs £1.40 on average, while diesel is close to £1.48. If those prices leap to £1.44 and £1.52 respectively, the price of filling up a typical 55-litre fuel tank could cost more than £81.

The cost of shipping goods has more than doubled over the past three weeks as freight companies are forced off their normal routes on long detours.

Freight prices have skyrocketed since November, rising by over 300 per cent amid the disruption.

And those rising shipping costs can have a direct impact on the price of goods sold in the UK.



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