Thread by @mercoglianos

1/Traffic in the #RedSea is piling up between Sudan and Jeddah waiting for military action.

A few days ago I discussed an op-ed in @LloydsList that called for the use of "gunboat diplomacy."

2/We have now seen nearly all the major container lines and major oil tanker firms announce they will not transit the #BabelMandeb

LIST: Shipping Giants Pause Red Sea Voyages as Attacks Mount

gcaptain.com/shipping-giant…

3/This means that the #Houthi are currently strangling the most significant trade route on the planet.

The Houthi are not the recognized government of Yemen, yet this non-state actor has completely disrupted the global #supplychain.

4/The navies of the world, including the @USNavy which has been reactive to attacks, and even the Chinese PLAN, which has been absent from any action, along with other navies are now formulating a plan to convoy ships through the area.

5/This is a time when the container lines have excess carrying capacity and declining freight rates, meaning lower profits heading into 2024.

xeneta.com/outlook/2024/o…

6/The tanker companies are dealing with reduced cargoes due to the cutback in production and a finite carrying capacity.

OPEC+ Agrees to Deeper Supply Cuts

gcaptain.com/opec-agrees-to…

7/Even US-flagged ships that receive subsidies from @US_TRANSCOM @DOTMARAD, and contracted to carry @DeptofDefense cargo are refusing to transit the Bab el-Mandeb, even with US escorts for fear that their ships may be damaged, captured or sunk.

8/This arguement by @MaerskLineLtd and @ARCships raises serious questions about the ability of #sealift in a potential peer-to-peer conflict in the Pacific if they are concerned about the #Houthi. This will alter any warplans set by @INDOPACOM @MSCSealift @US_TRANSCOM.

9/We saw the @DefenceU of Ukraine humble the Russian Black Sea Fleet.

Now we are witnessing a non-state actor - the #Houthi - forcing the world's trade to divert from the most dense ocean trade route on the planet, because the ocean carriers have deemed it to dangerous

10/We witnessed the impact of #supplychain disruptions during COVID off the ports of LA/Long Beach.

I have studied the interaction of military and commercial shipping for years and the warning has been laid out by the likes of @brucebrookings.

@brucebrookings 11/Now the ocean carriers, with power similar to the British East India Company of old, are mandating actions by the world governments and their military to make the seas safe.

But the damage is already done as rates, stock prices & inflation rise.

Who is the PIRATE?