As Houthi attacks escalate, stronger international measures must be implemented to safeguard shipping routes

The ongoing conflict in the Red Sea, marked by frequent Houthi rebel attacks, poses a grave threat to global shipping and international trade, according to the Cyprus Shipping Chamber.

In an interview with the Cyprus Mail, Thomas Kazakos, Director General of the chamber, highlighted the dire consequences these attacks have on maritime operations.

Kazakos called for stronger international cooperation and protective measures to safeguard seafarers and secure vital supply chains, underscoring the escalating costs and delays caused by these disruptions.

In addition, he outlined the ongoing initiatives the chamber is undertaking to bolster the sector in these challenging times.

Impact of Houthi Attacks on Global Shipping

One of the key concerns in global shipping revolves around the attacks in the Red Sea from Houthi rebels.
Indeed, Danish shipping giant A.P. Moller-Maersk warned on July 17 that disruptions caused by Houthi attacks are reverberating throughout its global network.

Since November 2023, these attacks have targeted commercial vessels, increasing shipping costs and delays across Asia, Europe, and beyond.

Maersk highlighted that Asian ports are experiencing significant delays due to rerouted vessels, causing congestion that may impact Australian ports.

Experts have asserted that the economic fallout will continue unless stronger measures are taken against these attacks

Recent attacks include the targeting of Maersk Sentosa and multiple other vessels, prompting US and EU-led security missions.

In this context, Operation Prosperity Guardian was launched to safeguard navigation, while the EU initiated the Aspides mission, acknowledging that increased shipping costs due to rerouting are contributing to global inflation.

“Recent Houthi attacks in the Red Sea are an extremely serious threat to international trade with significant implications for global shipping routes and transit times,” Kazakos told the Cyprus Mail.

He highlighted that the Red Sea serves as a critical maritime corridor, with “12 per cent of global trade” passing through it, linking Europe and Asia.

He noted that disruptions in this vital area lead to increased insurance premiums, rerouting of vessels, and extended transit times as ships opt for longer, safer routes to avoid potential attacks.

The director general pointed out that these disruptions not only escalate operational costs but also create delays in global supply chains, affecting the timely delivery of goods and impacting various industries that rely on raw materials.

“While the wellbeing of all seafarers is a priority,” Kazakos continued, “Cyprus-related ships have also been directly impacted, resulting in hostage situations and the loss of crew members.”

He termed these incidents as “devastating” and called for “stronger protective measures in the area.”

“We must urgently and intensely collaborate to stop the Houthis’ attacks on seafarers and merchant ships and to de-escalate what has become a grave threat to international trade,” Kazakos said.

The chamber’s response

In light of these developments, Kazakos detailed the proactive measures the Cyprus Shipping Chamber has adopted.

“The chamber closely monitors the situation and continuously raises its voice in the media against the ongoing illegal attacks on merchant vessels and seafarers in the Red Sea,” he explained.

He noted that the chamber, along with the international shipping community, is demanding that influential states take stronger measures to protect seafarers and ensure maritime safety.

“We emphasised the need for immediate action beyond mere condemnation,” he added, “as the safety of crew members and the security of global supply chains are at significant risk.”

Moreover, the chamber has been actively following updates from the Cyprus Government, the European Commission, the International Chamber of Shipping (ICS), and the European Community Shipowners Associations (ECSA) to provide timely advice to its members. Kazakos reiterated the significance of the situation.

“The impact of these disruptions in maritime operations tends to be reflected in higher costs for consumers and businesses relying on goods transported through this vital corridor,” he said.

Shipping costs and global trade

When asked about how these disruptions affect shipping costs and the prices of goods, Kazakos mentioned that “shipping companies are often confronted with increased insurance premiums and operational costs as they choose to take longer, costly routes to avoid the area”.

He explained that this situation inevitably leads to higher shipping rates for vessels passing through the Red Sea and, consequently, higher prices for the end products in stores.

“In the face of instability and heightened risk in the region,” he warned, “the impact on the economy can be severe”.

International Cooperation Efforts

Discussing international cooperation initiatives such as Operation Prosperity Guardian and the EU mission Aspides, Kazakos expressed strong support.

“The chamber strongly welcomed the launch of both operations, stressing that a defensive presence in the area addressing security concerns and keeping seafarers safe is essential,” he said.

Furthermore, he commended the collaborative efforts aimed at de-escalating the crisis and condemned the attacks on vessels, labelling them as a “flagrant violation of international law” and an assault on the fundamental principle of freedom of navigation.

Cyprus Shipping Chamber initiatives

Turning to the initiatives of the Cyprus Shipping Chamber, Kazakos highlighted the chamber’s belief in the importance of targeted political support for the shipping sector.

“Cyprus shipping has been essential to the Cyprus economy for decades,” he stated.

Moreover, he emphasised the need for further development of several strategic initiatives, including the establishment of a One-Stop-Shipping-Centre at the Shipping Deputy Ministry and an upgrade of EU Shipping Administration to address multifaceted maritime issues related to trade, energy, and security.

Kazakos also pointed to the necessity of immediate creation of a ‘Cyprus Shipping Company with Limited Liability’, as well as the digitalisation and automation of services at the Shipping Deputy Ministry.

“Establishment of a Specialised Financing Institution for the Shipping and Transport sector is also crucial,” he added, “especially to support the ‘Green’ transformation of the sector”.
Additionally, he reassured that the “Cyprus Tonnage Tax System remains unaffected with the correct implementation of EU Directive on ECD Pillar II rules on Shipping”.

These initiatives, Kazakos asserted, reflect the chamber’s commitment to maintaining Cyprus’ status as a leading global maritime centre.

“We aim to benefit our member companies and the Cyprus economy while addressing the complex and evolving challenges faced by the shipping industry today,” he said.

He also said that the chamber is actively participating in international shipping organisations to ensure Cyprus has a voice in shaping global shipping policies and regulatory changes.

Looking ahead

What is more, Kazakos provided insight into the chamber’s upcoming initiatives, noting that its main objectives have remained consistent despite evolving geopolitical and economic developments.

“These include promoting the interests of Cyprus shipping, further enhancing the prestige of the Cypriot flag, and safeguarding the interests of its Members,” he explained.

Also, he underscored the importance of collaboration with the Cyprus government and other professional organisations to upgrade Cyprus’ shipping infrastructure.

As the chamber prepares to celebrate its 35th anniversary in 2024, Kazakos expressed pride in the organisation’s longstanding contributions to the sector, the economy, and society at large.

“We are hosting a series of professional, social, and charitable events, attracting high-level personalities from both the domestic and international shipping sector,” he shared.

“These events highlight both the recognition that Cyprus shipping enjoys at local and international levels and the significant contribution of the industry to the economy and society, which remains committed to Cyprus and its flag, as they have for decades,” Kazakos concluded.