US halts 14 Houthi drones in Red Sea; shipping giants divert routes

In response to escalating drone attacks from Houthi-controlled areas of Yemen, the US military confirmed the successful interception of 14 one-way attack drones in the Red Sea. Major shipping companies, including MSC Mediterranean Shipping Co. SA and CMA CGM, are diverting vessels away from the Red Sea due to increased threats. The USS Carney and the UK navy thwarted the attacks, but concerns over trade disruption persist. MSC and CMA CGM are rerouting ships, while UK naval forces also repelled a suspected drone attack. The situation poses challenges to global supply chains, potentially increasing freight rates and causing delays.

Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.

US Navy Shoots Down 14-Drone Wave as Shippers Avoid Red Sea

By Brendan Murray and Charles Capel

The US military said it shot down 14 drones in the Red Sea launched from Houthi-controlled areas of Yemen as attacks on commercial carriers continue from the Iranian-backed group, threatening havoc for world trade.

Major shippers MSC Mediterranean Shipping Co. SA and CMA CGM were the latest to announce on Saturday that they won’t send their vessels through the Red Sea for now in the face of rising threats.

The unmanned aerial systems “were assessed to be one-way attack drones and were shot down with no damage to ships in the area or reported injuries,” US Central Command said in a post on X, formerly Twitter. “Regional Red Sea partners were alerted to the threat.”

The drones were struck down by the USS Carney guided missile destroyer early on Saturday. The UK navy also repelled a suspected drone attack.

In the early morning hours of December 16 (Sanna time) the US Arliegh Burke-class guided missile destroyer USS CARNEY (DDG 64), operating in the Red Sea, successfully engaged 14 unmanned aerial systems launched as a drone wave from Houthi-controlled areas of Yemen. The UAS were… pic.twitter.com/Rjkzng5LxW

— U.S. Central Command (@CENTCOM) December 16, 2023

MSC Mediterranean Shipping Co. SA, the world’s largest container line, joined competitors in diverting ships away from the Red Sea.

The MSC Palatium III was attacked on Friday in the Red Sea, the company said in a statement on its website, confirming earlier reports. There were no injuries among the crew of the container ship, though there was “limited fire damage” and the vessel has been taken out of service.

“Due to this incident and to protect the lives and safety of our seafarers, until the Red Sea passage is safe, MSC ships will not transit the Suez Canal eastbound and westbound,” the company said in its statement.

“Some services will be rerouted to go via the Cape of Good Hope instead,” it said, referring to the southern tip of Africa.

Separately, the French group CMA CGM instructed its container ships scheduled to pass through the Red Sea to pause their journey in safe waters until further notice.

UK naval forces shot down a suspected attack drone that was targeting merchant ships in the Red Sea, Defense Secretary Grant Shapps said in a post on X on Saturday. The HMS Diamond used a Sea Viper missile to down the target, he said, without giving more details.

HMS Diamond has shot down a suspected attack drone targeting merchant shipping in the Red Sea – destroying the target with a Sea Viper missile. pic.twitter.com/x68zX4WtWi

— Rt Hon Grant Shapps MP (@grantshapps) December 16, 2023

Flexport Inc., a freight forwarding platform based in San Francisco, said in a blog post that taking the route around Africa prolongs the journey by seven to 10 days compared with using the Suez Canal.

Rebels in Yemen escalated a threat against ships with ties to Israel in November, calling them “legitimate targets,” and appear to be targeting vessels in the vicinity more generally.

Rerouting the world’s container fleet around the conflict zone during Israel’s war against Hamas in Gaza threatens to increase freight rates and cause delays rippling across global supply chains.

About 5% of global trade depends on the Panama Canal and 12% depends on Suez, according to Marco Forgione, director general at the Institute of Export & International Trade.