Jordan counts cost of Red Sea disruption after year of attacks

Houthi militia started attacks in the water way, home to kingdom's only port, shortly after Gaza war began

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  Dr Dureid Mahasneh, chairman of the Jordan Shipping Association and chief executive of Gargour Shipping, at his office in Amman, Jordan, on Tuesday October 1. Photo: Khaled Yacoub Oweis / The National

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  The commercial fortunes of the Jordanian port city of Aqaba are holding steady at a time of turbulence caused by conflict between Israel and the Palestinian group Hamas. Reuters

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  Dr Dureid Mahasneh points to a painting of Jaffa port at his office. The city on the Mediterranean is where the family business of the Palestinian Gargours began in the late 1920s, exporting oranges. Khaled Yacoub Oweis / The National

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  The general cargo centre at Jordan's Aqaba port on May 2024. Khaled Yacoub Oweis/ The National

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  The aftermath of an explosion caused by a missile hitting the tanker Cordelia Moon. The video was released on October 4 following an attack by the Yemeni Houthi rebels in the Red Sea. EPA

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  British Royal Navy gunners watch as Sea Ceptor missiles fired from Type 23 frigate HMS Richmond bring down two Houthi drones. The Richmond has taken part in Operation Prosperity Guardian, protecting merchant shipping in the Red Sea, along with HMS Lancaster and HMS Diamond. EPA

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  The German Navy frigate Hessen leaves Wilhelmshaven for the North Sea en route to the Red Sea to join an international naval force to protect commercial vessels. Getty Images

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  The Chios Lion tanker ship after an attack in the Red Sea by Houthi rebels during the summer. EPA

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Attacks on shipping in the Red Sea from Yemen have forced Jordan into costly adaptations to its trade, the chairman of the Jordan Shipping Association has said.

Nearly a year after the Gaza war-related attacks by Yemen’s Houthi rebels started, Dr Dureid Mahasneh told The National in an exclusive interview that Mediterranean ports in Turkey, Greece and Egypt have been increasingly feeding Jordan’s only port at Aqaba with Far East cargo.

Without the Houthi threat, the cargo would have arrived at Aqaba along mainstream routes through the Bab Al Mandeb.

“There have been no shortages in Jordan. But lots of goods have become more expensive,” said Dr Mahasneh, chief executive of Gargour, one of the oldest shipping companies in the Levant.

In the first eight months of the year, the number of cargo ships passing through the Bab Al Mandeb fell by 61 per cent to 4,557 ships. Oil tanker traffic was down by 64 per cent to 2,267. The strait is a trade artery between the Far East and Europe, as well for Gulf oil exports to continental Europe.

We have been seeing a high rise in costs, delays, and less business

Dr Dureid Mahasneh,
chief executive, Gargour shipping

But imports and exports handled by Aqaba port have remained steady at 14.1 million tonnes in the first eight months of this year compared with the same period 2023, according to the latest shipping association data.

Jordan imports virtually all of what it consumes, with Aqaba, situated on the Red Sea, between the Israeli port of Eilat and the coast of Saudi Arabia, accounting for the vast majority of the kingdom’s trade flows. The Far East is a primary source of Jordanian imports, except for oil and commodities.

“We have been seeing a high rise in costs, delays, and less business. A big shipping line that we represent is no longer coming to Aqaba directly,” said Dr Mahasneh, who has a doctorate in marine sciences, and is also vice president of the Federation of National Associations of Ship Brokers & Agents.

He said that Aqaba is a destination port and not a significant point of transit. “You only bring cargo to Aqaba mostly for Jordan, and a little for a country like Iraq, for example.”

The major shipping lines, he said, had decided to divert south and go around the Cape of Good Hope, especially after the Houthi attacks escalated at the beginning of this year, despite increased presence of western naval forces in the area.

“Combining with other liners they are putting containers coming to Aqaba through the Mediterranean,” Dr Mahasneh said from his office in Amman. A painting of the port of Jaffa, where the Gargour trading business started in the late 1920s, mainly as an orange exporter, hangs behind his desk.

Houthis release video of Red Sea attack on tanker Cordelia Moon

00:37

“The main line between Europe and the Far East runs through the Red Sea and Suez Canal and vice versa. But a lot of shipping lines have been hesitant to go through Bab Al Mandeb because of the volatile situation there.”

In an indication of the increased feeding activity into Aqaba, the port handed 296 CTR (container fitted) vessels by the end of August, a 23 per cent rise over the first eight months of 2023.

Cargo is also being rerouted by land through Dubai’s Jebel Ali Free Zone. A car imported into Jordan through Jebel Ali can cost up to $4,000 extra in shipping than when it would arrive directly in Aqaba by ship, Dr Mahasneh said.

Inflation in Jordan is forecast at 2.7 per cent this year, compared with 2.2 per cent last year, according to International Monetary Fund. The authorities in the kingdom subsidise flour and some other staples, shielding consumers from price fluctuations. Oil is imported Saudi Arabia and from Iraq, which has made Jordan unaffected by delays by tanker deliveries through the Bab Al Mandeb.

Fewer vessels emptying cargo in Aqaba have also created difficulties for Jordan's phosphate and potash producers, he said, because the ships, once they offloaded their cargo, used to carry exports of the two products.

Phosphate and potash, separately produced by two state monopolies, account for most of Jordan's exports by value, followed by textiles and other goods manufactured at a joint industrial zone with Israel.

The Iran-backed Houthis started attacking ships in the Red Sea less than two weeks after the Gaza war broke out with an attack by the Hamas, another militant group supported by Iran, on Israel on October 7. The Houthis described the move as aimed at pressuring Israel into halting its operations in the strip.

General cargo vessels handled by Aqaba fell 46 per cent to 27 per cent, and ships carrying cars and other vehicles (called ro-ro) dropped 61 per cent to 49 in the first eight months of this year. Container traffic fell 10 per cent to 272,988 TEUs (twenty-foot equivalent unit).

“There is no remedy other than building up feeder vessels to bring in the cargo and relying on Jebel Ali,” Dr Mahasneh said.