Screengrab captured from a video shows Yemen's Houthi fighters' takeover of the Galaxy Leader on the Red Sea coast off Al-Hudaydah on 20 November 2023 in the Red Sea, Yemen. (Photo: Houthi Movement via Getty Images) 
Half of the container ship fleet that regularly transits the Red Sea and Suez Canal is avoiding the route now because of the threat of attacks, according to new industry data.
The tally compiled by Flexport shows 299 vessels with a combined capacity to carry 4.3 million 20-foot containers had either changed course or planned to. That’s about double the number from a week ago and equates to about 18% of global capacity.
The diverted journeys around Africa can take as much as 25% longer than using the Suez Canal shortcut between Asia and Europe, according to Flexport. Those trips are more costly and may lead to higher prices for consumers on everything from sneakers to food to oil if the longer sailings persist.
The attacks in the Red Sea are carried out by Yemen-based Houthis, who say they’re targeting ships linked to Israel in support of the Palestinians. But ships without direct links to Israel also have been targeted, and as the escalation of the war threatens global trade, a US-led task force is trying to bolster security on the key waterway.
Some ships are trying to broadcast their neutrality as they continue using the route.
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The trend in Flexport’s numbers mirrors a separate count by Swiss freight-forwarder Kuehne + Nagel International that, as of Wednesday, showed 364 vessels with capacity for 5 million 20-foot containers being rerouted around Africa. That compares with 314 vessels on 22 December.
The figures show the scale of the mounting maritime disruption after Houthis launched more than 100 attacks on commercial ships in the past month. The MSC United VIII container ship was targeted on Tuesday while en route to Pakistan from Saudi Arabia.
Fifteen container vessels — 10 of them operated by AP Moller-Maersk — have either stayed on course or recently abandoned diversion plans in order to cross into the Red Sea towards Suez, according to Flexport’s analysis of Alphaliner data as of Wednesday.
US sanctions funding for Houthis as Red Sea threats persist
The US sanctioned one person and three money exchanges it said have helped transfer millions of dollars to the Houthis on behalf of Iran.
The action Thursday comes as the Yemen-based militant group’s attacks on ships transiting the Red Sea have snarled trade in the region, sending half of the container ship fleet that regularly uses the sea and the Suez Canal on much longer routes.
Read more: Half of Red Sea Container-Ship Fleet Avoids Route After Attacks
Brian Nelson, the Treasury Department’s Under-Secretary for Terrorism and Financial Intelligence, said in a statement the action “underscores our resolve to restrict the illicit flow of funds to the Houthis, who continue to conduct dangerous attacks on international shipping and risk further destabilizing the region”.
Treasury sanctioned Turkey-based money exchanger Al Aman Kargo Ithalat Ihracat Ve Nakliyat Limited Sirketi, which it said serves as a conduit for Iranian money to the Houthis’ businesses in Yemen. The agency sanctioned Nabco Money Exchange and Remittance in connection with this trade.
Treasury also sanctioned Nabil Ali Ahmed Al-Hadha, the president of the Currency Exchangers Association in Houthi-controlled parts of Sanaa, alleging that he served as a financial intermediary for the Houthis’ Iranian sponsors and helped disguise the source of the funds by converting them into Yemeni rials using Al Rawda Exchange and Money Transfers Company. DM