Yemeni blockade raises cost of Israel's Mediterranean trade

News Desk - The Cradle 

The threat from Yemeni armed forces to Israel-linked commercial ships has caused insurance rates to skyrocket

The threat to Israeli-linked commercial ships in the Red Sea and Indian Ocean from Yemen's Ansarallah-led government is now extending to Israel's commercial shipping in the Mediterranean, Israeli business newspaper Globes reported on 31 May.

Globes reports that Israeli car importers received a message from Alaloff shipping company, which represents the Grimaldi shipping company in Israel, stating that on 15 June, transport prices for cars and mobile equipment in dedicated ships traveling from Europe to Israel will sharply increase.

The increased shipping costs for ships in the Mediterranean are due to a sharp 200 percent increase in the War Risk Surcharge. The increase aligns with similar increases in insurance rates for commercial ships coming from East Asia to Israel after Yemen began its attacks in the Red Sea in November.

At that time, Yemeni forces began to target Israeli-linked ships traveling from Asia through the Red Sea and Suez Canal in response to Israel's genocide in Gaza. In response, many shipping companies rerouted their ships around the southern coast of Africa instead, extending the journey to Europe by two weeks and significantly raising shipping costs.  

The increase in shipping costs for cars transported through the Mediterranean is expected to be about NIS 800 (USD 215) per vehicle.

The cost of shipping other products to Israel is also expected to rise. According to the Alaloff shipping announcement, the increase in the War Risk Surcharge also applies to all types of cargo leaving Israel.

Because many cars and other products being shipped to Israel via the Mediterranean have already come from East Asia, the additional war insurance premium must now be added to the cost of sending cars around the Horn of Africa instead of through the Red Sea.

The Israeli economy has suffered since the start of the war on Gaza. The Israeli government has been forced to borrow an unprecedented amount to finance its budget deficits. Costs have increased due to weapons purchases for military operations in Gaza, payment of reservist soldiers called up to fight in the strip, and financial support for settlers displaced from their homes in Israel's north on the border with Lebanon and the settlements surrounding Gaza.