Hebrew Newspaper: Red Sea operations against our ships caused damage to the economic situation
The Hebrew economic newspaper “Calcalist” said in a report published on its official website that, due to Houthi attacks, ship movement in the port of Eilat has declined by 80%.
Follow up – Al-Khabar Al-Yemeni:
According to “Calcalist,” major shipping companies have announced the suspension of sailing in the Red Sea and the Suez Canal due to the ongoing threat from Sana’a forces, which are currently targeting the port of Eilat, causing significant damage. The cost of living will rise significantly as a result of the new alternate route’s high transportation costs.
The declaration that the Biden administration is thinking of attacking the Houthis in response to the increasing attacks and harm to global trade, according to the newspaper, added fuel to the fire of the global crisis in the Red Sea.
Moreover, shipping company stocks have already seen a significant rise in the past few days due to the Houthi attacks and threats. The crisis has had a significant impact on the port of Eilat since the Houthi attacks began, which has already seen an over 80% decrease in activity.
Chinese shipping giant OOCL announced that it would halt sailing in the Red Sea region, joining other shipping companies that have recently suspended their operations in the region and the Suez Canal due to Houthi attacks in Yemen.
It described what happened as a “storm” that began with the announcement of Maersk suspending all its ship movements in the Red Sea. The German company Hapag-Lloyd also joined this step.
Additionally, on Saturday, the world’s largest shipping company, MSC, and the French company CMA CGM announced their decision to suspend sailing operations in the region as well.
The decision of the shipping companies might disrupt shipping lines worldwide, given the importance of the Suez Canal for global trade. The formation of the Biden administration is seen as considering an attack on the Houthis in response to the increasing attacks and damages inflicted on global trade.
According to the state-established compensation mechanism for companies, the Port of Eilat will seek compensation from the government for the loss of revenue; however, this has not yet been approved for the month of December, and it is unclear what the future holds for the port if the crisis persists. “The damage inflicted on the port is expected to have long-term effects,” he continued.
For example, the Port of Eilat is responsible for unloading approximately 50% of the vehicles arriving in Israel, and other ports may not necessarily be able to meet this.
The newspaper states in its report, “If there is one area that can be defined as “critical” for the activity of the Port of Eilat, this is the vehicle sector, which accounts for 85% of the unloading activity at the port. Now, new vehicles will not arrive through Eilat until at least January, and an important factor needs to be added to this situation as the new vehicles are scheduled to arrive in Israel during the month of December because the purchase tax on electric and electrically connected hybrid cars is expected to rise during next January.”
Car importers are asking the Tax Authority to exempt cars from customs duties while they are outside Israel’s economic waters, but the authorities have not yet responded to the request and are still considering it. However, in any case, these cars will not reach Eilat.
The newspaper mentioned that if a solution is not found for the problem, consumers will pay more. It also stated that currently, 99% of goods (in terms of volume) arrive in Israel by sea, with 40% of them passing through the Suez Canal. Consequently, the discussion of finding another shipping route necessitates a substantial alteration to the way that goods are transported into Israel.
The first possibility is that these ships will sail via Africa, which could result in delivery delays of weeks in addition to extra costs.
The second option is to redirect some goods to be transported by air, but there are goods that can’t be transported this way, especially heavy raw materials such as cement, oil, and vehicles. Furthermore, air transportation also has additional costs.