How Are Attacks on Israeli Ships Wreaking Israeli Economy?
Story Code : 1099755
Bizportal, an Israeli newspaper, suggested that the Yemeni attacks and also threats impact the price of the imported goods to the occupied territories, adding that the insurance and transportation companies that have to use the Bab-el-Mandeb Strait have increased their fares, imposing addition costs on the life of the Israeli citizens.
According to the newspaper, the statements of importers, including car importers, show that import costs have increased significantly, especially since the Yemenis announced that they will continue their attacks against Israeli targets in the Red Sea and Port of Eilat in the extreme south of the occupied territories.
In the latest case, the seizure of the Israeli ship Galaxy Leader, a vehicle carrier, proved that Sana’a’s threat against the Israeli regime’s maritime trade fleet is quite serious, and the strong presence of the US naval fleet in the Red Sea has failed to deter these threats.
The newspaper admitted that many companies are now facing the risk of delays in the delivery of goods, and Yemeni attacks in support of Gaza have caused a lot of damage both directly to Israeli regime and to ships passing in the waters near Yemen’s sea borders.
Bizportal adds that for example ZIM shipping company has shifted the route of its ships from the east to Israel in a preventive move to ensure safety of its crew, vessels, and goods of customers.
The company has announced that as a result of this change of route, it should be expected that the time of transfer of goods from the origin to the occupied territories will increase.
It is unknown how long the delivery of the goods to Israel will be delayed, but according to estimates, there will be a delay between two and three weeks, which is about twice the usual time.
Referring to the alternative route for the ships headed to Israeli regime through Horn of Africa, Globes news website reported that the ships that change their ordinary route of the Red Sea should sail additional 18 days to reach the Israeli ports.
Bizportal admits that such a route change will lead to a price hike for imported goods, adding that higher consumer prices will mean higher inflation and can influence the decisions on the interest rates in the future.
Until recently, shipping companies, including ZIM, used to transport cars from Asia, especially Japan, Korea and China, to Israel’s ports in less than ten days. Now the consumers fear price increase in the car industry, because the eastern cars account for an important part of the Israeli car market, and ZIM, in partnership with a Japanese company, is the main party delivering car cargoes to Israeli regime.
One of factors leading to expectation of higher car prices is the fear and caution of insurance companies because they have to expect big damages as the increased attacks on the ships and rerouting brings further risks like piracy.
Some companies even made it clear they are no longer interested to insure the ships, or at best they demand higher insurance prices.
In general, what would come in the future days is dependent on the range and time of battle expansion. The Israeli newspaper writes that the Yemeni operations should stop before reaching a “determine point.”
The website of the Israeli economic analysis company Globes counted the impacts of blocking Israeli ships from crossing the Red Sea and emphasized that this has serious consequences for the economy.
Citing car industry authorities, Globes estimates that prevention of ships headed to Israel from sailing through the Red Sea will double the sailing time from the east and will substantially influence the prices of imported vehicles.
According to this outlet, after negotiations with senior officials of a defense organization about the status of attacks on the Israeli ships, the company has decided to sail away from Red Sea route.
If the disruption in the maritime import and export route from the east continues, this issue will have a comprehensive negative impact on the Israeli economy, especially in the import of raw materials and consumer products needed by the Israeli industrial sector. This, in turn, causes damage to exports and a significant increase in inflation, according to Globes that cites an Israeli official in logistics sector.
The Israeli smallness of size and geopolitical isolation have imposed a full dependence on the maritime trade with the world. That is why Tel Aviv has tried over decades to take possession of big shipping companies.
Many of big shipping companies are present in Israeli regime. For example, Ungar’s Ray Shipping operates a range of PCTC ships that carry finished vehicles, as well as tankers and bulk carriers. Marine Traffic, a website monitoring global shipping, on Tuesday reported that two Israeli ships, Hermes Leader and Glovis Star, that were targeted off Yemen coasts belong to Ungar’s Ray Shipping company.
Israeli businessman Idan Offer is one of the world’s biggest ship owners. Forbes reports his net worth at $14 billion, and counts his ship fleet as including 200 tanker, container, and car carrier vessels. He also holds stakes in French shipping company LNG Coolco.
In addition to Ofer, prominent shipping companies including XT shipping are operating in the Israeli regime.
ZIM shipping company is most closely related to the Israeli government, since the government has a ‘golden share’ or ‘special state share’ in it, and this allows Tel Aviv to ensure access to shipping network “in an emergency or for national security purposes” when private companies refuse to provide services.
ZIM has a fleet of 129 container carriers, 16 car carriers, and 33 chartered ships. ZIM CEO Eli Glickman amid Gaza war said: “Despite the war-related challenges, the company’s maritime operations continue uninterrupted everywhere, including to and from Israel.”
Still, ZIM has for sometime admitted the negative impacts of political and geopolitical mess in the Israeli regime on its shares, and now the company’s officials are even more worried about security risks to their ships and further drop in value of their shares in the Israeli stock exchange.
The economic instability caused by the war, especially in the supply and demand market, shows that the disruption in foreign trade is serious and the cabinet has not been able to ward off negative consequences of attacks on its maritime transport network.
As the war continues, the Israeli regime faces the worst economic conditions in half a century. The war crippled many of its economic sectors, forced down consumer demand, and labor force has seriously gone down as the army recalled hundreds of thousands of reserve forces.
Economic data published this month show that for the second month in a row, while the prices of some goods such as fruits, vegetables and clothes have increased and hence impacting the costs of living, a crash is hitting important sectors such as housing. In the meantime, Morgan Stanley economist Georgi Deyanov gives a 40-percent chance of interest rate cut by Israeli central bank.