Cyprus Shipping Chamber (CSC) official has sounded the alarm bells over the continued attacks by Houthis on shipping in the Red Sea, noting that if the situation is not tackled the cost of the disruption in the supply chains will perhaps exceed that of the Covid-19 pandemic.

Speaking to CNA, Thomas Kazakos, the CSC Director General, said that the effects of the new disruption will be more pronounced on an island-state, such as Cyprus, as 98% of its trade is conducted by sea.

Following the conflict between the Hamas militant group and Israel in the Gaza Strip, Houthis have increase attacks on shipping in the Red Sea, initially on shipping associated with Israeli interests or ships bound for Israeli ports. However, Arsenio Dominquez, the new IMO Secretary-General has stated that attacks are widened to shipping in general.

Eighteen large shipping companies, including container heavy weights, such as Maersk, Happaq Lloyd and MSC have announced they stopped using this shipping route, estimated to amount approximately 15% of global trade.

“For us what’s at stake is the unhindered passage of commercial shipping vessels,” Kazakos said, noting that shipping does not only carry consumer products but also vital items such as fuel, grain, iron and pharmaceuticals, the absence of which “could bring huge consequences to economies, apart from inflationary pressures.”

Kazakos noted that rerouting ships from the Suez Canal, a vital shipping lane from Asia to Europe, constitutes a “serious delay in journey time, increased costs due to fuel consumption, delays in delivery times and increased freight costs.”

“This would have a chain reaction with expected significant prices hikes and commentators have suggested the impact will worse than the increase in freight rates during the Covid-19 pandemic,” he went on to say.

Replying to a question, Kazakos said that armed guards on vessels cannot solve the problem. He recalled that Cyprus was one of the first states to legislate carrying weapons on ships during the period of piracy in the same region, but added that attacks are taking place with the use of drones.

“The outcry by the international shipping family is a given, we all stress the need for powers to engage. For us the message is clear, the international community is obliged to provide support and protect world trade which by 90% relies on global shipping,” he said.