In the blink of an eye containerized supply chains were thrown into disarray by a wave of attacks on shipping in the Red Sea. As of New Year’s Day 2024 there were few signs of a coming resolution even after the diversions of more than 300 ships around the Cape of Good Hope.
A protective regime for container ships had not materialized as of the new year that guarantees freedom of navigation and eliminates or significantly reduces the risk of attack in the area of the Bab al-Mandab strait. No organized system of naval escorts or convoys had come into existence, or indications provided that such a response is coming. Nor have land-based threats been eliminated let alone seriously confronted, though there have been reports that strikes are being considered.
Rather the Operational Prosperity Guardian coalition led by the US Navy is relying on deterrence created by a limited physical presence and its ability, mostly with success thus far, to intercept air-based weapons to keep the Suez route open to at least some container traffic.
But for carriers, who are under pressure to resume transits and thereby show confidence in the coalition’s efforts, not to mention commercial pressure to resume normal routings, this is not enough.
A complicating factor is that protection of shipping, as important as it might be economically, is not the only priority at play in this scenario. The United States is juggling its stated desire to protect freedom of navigation while seeking to avoid escalation of the Israeli-Hamas war into a regional conflict.
It has been a long time since shipping has been caught directly in the geopolitical crosshairs the way it is now.
At TPM24, several panels, speeches and one-on-one discussions will touch on the Red Sea crisis, shedding light on what it means for shippers and other container supply chain players.
Join us in Long Beach to experience a first-hand connection to the beating heart of the container shipping market through a curated, editorially independent program and extensive networking with industry peers and senior executives from across the industry.