By Andreas Karamitas
The Cypriot registry seems to remain unaffected for the time being by the latest developments in the Red Sea, as factors of the Cypriot Shipping industry report that the number of ships under the Cypriot flag remains stable and unchanged while the Cypriot Shipowning industry adequately and with all the means at its disposal faces the challenges brought about by the war in Gaza and the attacks of the Houthis.
However, the latest events may affect the Cypriot Economy more intensely and especially in energy matters as the attacks have extended to cargoes with fuels or technical equipment related to the energy transition. Already, the EU has mobilized as it appears willing to send naval and air forces to enhance the security of the ships of the European Shipping industry after the involvement of the USA and UK.
The role of the EU and the developments concerning the security of the European Fleet
In an effort to support the European Shipping industry, the EU has already approved the establishment of a special naval mission in the Red Sea with the aim of protecting the ships of European interests from possible terrorist attacks. At the institutional level, the European External Action Service is already working on this issue with the ultimate goal of the European naval mission taking action on February 19th. At the same time, the European institutions are in constant contact with the European Community Shipowners' Associations (ECSA) and the International Chamber of Shipping (ICS) for better coordination of actions. It is noteworthy that for the first time the union is actively involved in military upheavals related to Shipping.
How Cyprus is affected
Until now, all the competent sources of the domestic Industry report that the Cypriot Shipping industry has not been affected by the crisis of the Houthis at least at the level of numbers. The total of the Cypriot fleet remains at stable levels and the Cypriot Shipowning industry shows unaffected by the events so far.
However, it is important to mention, the fact that Cyprus imports products and goods mainly from Europe and less from China or markets that until now passed through the Suez Canal. This condition, however, may change in the near future, given that 98% of the goods of Cyprus are imported by Sea. A percentage, which in comparison with other states is quite large. For this very reason, the problems that arise in the global supply chain may also affect Cyprus.
The Deputy Ministry of Shipping issued a circular to its customers
According to a circular that the deputy ministry of shipping made known to the industry, it closely monitors the situation and has already taken preventive actions. In this context, the Deputy Minister of Shipping Marina Hadjimanoli said that temporary measures will be taken to protect the Cypriot ships "by virtue of articles 71(1)(e) & (st) and 71(2(a) of the Protection of Cypriot Ships from Acts of Piracy and other Unlawful Acts Law of 2012 (Law 77(I)/2012), and a relevant Decree was issued which came into force on December 23, 2023, by which the high-risk areas are extended, so as to cover the areas of the rebels' attacks".
The deputy minister also highlighted the environmental consequences as the ships that choose to avoid the area and use different sea routes, need more fuels resulting in a significant increase in emissions of pollutants. In addition, due to the attacks, the insurance premiums also increased as the shipping companies and shipowners want to insure their ships, the personnel and the cargo they carry.
Among other things, Ms. Hadjimanoli referred to the delays that occur from the ships that choose to make the circumnavigation of Africa avoiding the Red Sea and the Suez Canal, which are also the fastest sea routes for ships coming from Asia with final destination Europe. However, the Deputy Ministry of Shipping does not rule out taking additional measures if necessary while being in contact through its representatives and with the International Maritime Organization.
The humanitarian dimension is also emphasized by the CSC
The Cyprus Shipping Chamber expresses its concern and through the organizations that represent the European Shipping and the shipowning family, they sound the Alarm Bell, as they believe that the crisis is deeper since Shipping transports 90% of the goods and is the main pillar of the supply chain. Specifically, new questions arise such as what will happen to the delays in delivery of goods and products of first necessity such as food, medicines and medical equipment.
Also, the CSC is not only concerned about the economic dimension but also the human one as there are reasonable questions about how the seafarers will be protected from the attacks, who do not have the ability to armor their lives from the attacks and also by default they are unable to counter any attack, without military support either from the air or by sea. In relation to Cyprus and in statements to "K", the Director of the Cyprus Shipping Chamber Mr. Thomas Kazakos said the following: "The viability of serving Cyprus and the wider Eastern Mediterranean is in doubt and perhaps it is also unprofitable for the companies.
I do not think we will get there, but we have to take into account issues of stocks in the basic products not only in the consumer but also in those that the businesses need but also the Society in general. So this issue beyond the basic principle that Shipping should be allowed to operate smoothly as it serves the world trade should not be tolerated the targeting or victimization of Shipping and the seafarers who do not have political or military activity so they punish individuals and a service that are valuable".
Delays in the Cypriot ports due to the new sea routes
In communication with us, the association of shipping agents mentioned that the crisis may affect the Cypriot ports due to the delays in arrival of the ships. This, as noted, is due to the fact that many shipping companies have proceeded to change their usual routes and some cargoes do not let them come directly to Limassol or Larnaca.
However, the director of the Association of Shipping Agents Mr. Dimitris Kouzapas told "K" that the consequences have not yet affected the port industry in a tragic degree as 50% of the Cypriot imports come from Greece and only 12% of the imports are related to the Middle East.
[This article was translated from its Greek original]
