Attacks on merchant vessels in Red Sea have tripled transportation cost, says CEO of Indian shipping firm
Jan 13, 2024
Gandhinagar (Gujarat) [India], January 13 : Weighing in on attacks on merchant ships by Yemen-backed armed Houth rebels in the Red Sea, Raajesh Bhojwani, the Chief Executive Officer (CEO) of RBB Ship Chartering, on Friday said the shipping costs have gone up manifold in the wake of these incidents.
RBB Ship Chartering deals in ship chartering services, including dry bulk cargo shipping and various types of vessel charters.
"These incidents in the Red Sea are a cause for concern for the shipping industry. The Europe-bound containers of cargo companies are taking the Cape of Good Hope route instead of the Suez Canal after these incidents on sea came to light. However, this re-routing of the shipping assets has led to a trippling of the transportation cost," Bhojwani told ANI on Friday.
"Several insurance companies have jacked up premiums by 100 times for the ships sailing in the Red Sea while some have stopped offering an insurance cover altogether. If ships use the Cape of Good Hope route, their journey time increases by 8-10 days, leading to excessive use of fuel. The prevailing situation has put Indian exporters at risk of becoming non-competitive in other market segments," he added.
The Houthi rebels earlier owned up to the attacks in the Red Sea, claiming that they were in retaliation for Israel's ongoing military operations in Hamas-controlled Gaza.
The Yemen-backed armed group said they would not stop targeting shipping assets trawling in the Red Sea until the ongoing Israeli military operations in Gaza end.
The Houthis have launched several drone and missile attacks on Israel since it went to war with Hamas in Gaza. However, the majority of these projectiles were intercepted.
Israel launched air strikes in Gaza and later rolled out its cavalry across the border in response to the Hamas attacks on October 7 last year.
Moreover, US military forces, along with the United Kingdom and with support from Australia, Bahrain, Canada, and the Netherlands, successfully carried out strikes against a number of targets in Yemen used by Houthi rebels.
National Security Council spokesperson John Kirby also emphasised that these were "self-defense strikes, and in keeping with our obligations," to defend US troops overseas and protect the flow of commerce, CNN reported.
