THIS UP THEIR KAMIKAZE DRONE BOAT CAMPAIGN
The Houthis are preparing to deploy more drone boats packed with explosives in their ongoing campaign against merchant shipping in support of Hamas’s war with Israel. United Kingdom Maritime Trade Operations (UKMTO) reported an incident where the bulk carrier Summer Lady was approached yesterday morning by 12 small craft in the southern end of the Red Sea. The master of the vessel reported these craft as a mix between fast craft and smaller kayak-type vessels with some appearing to be uncrewed. The Houthis have switched over the past three weeks to using kamikaze drone boats in attacks, which have proven more effective than their flying drones and ballistic missiles. A Greek-owned and operated bulk carrier, Tutor, sank last month having been hit by a USV with the loss of one seafarer’s life. Other ships have sustained damage from USVs in recent weeks. Adding to the growing panic for seafarers transiting the Middle East, the Houthis claimed last week to have launched a homemade long-range hypersonic missile called the Hadim-2. This solid-fuel missile was reportedly used to target a Liberian-flagged ship, the MSC Sarah V, in the Arabian Sea.
HMM FIRES BACK IN LEGAL BATTLE WITH SAMSUNG ELECTRONICS AMERICA
HMM, South Korea’s flagship carrier, has gone on the attack in its bid to rebut overcharging claims levelled by Samsung Electronics America. Having lodged cases with the Federal Maritime Commission (FMC) in Washington DC against COSCO, OOCL, SM Line and ZIM, Samsung Electronics America went after HMM last month, claiming the carrier imposed around 96,000 detention and demurrage charges which it labelled “erroneous” in a 24-page document. HMM has just fired back lodging a $13m suit at a court in California, over what it claims are unpaid bills, as well as seeking to dismiss the case lodged with the FMC. The FMC has been besieged with record numbers of shipper complaints during the period of liner shipping’s greatest era of profits. The commission’s powers were strengthened two years ago with the passing of the Ocean Shipping Reform Act.
FMC LISTS HMM AS A STATE-CONTROLLED SHIPPING LINE
South Korean national-champion container line HMM has been added to the U.S. Federal Maritime Commission’s list of “controlled carriers,” which means that FMC views HMM as a state-owned enterprise. Controlled carriers are subject to extra regulatory scrutiny from the FMC, tempered by exceptions for carriers controlled by allied nations. South Korea is a longtime American ally, so HMM is exempt from most requirements. It remains subject to two narrow provisions about service contract disputes and annual reporting, which would not affect most shipper interactions. In March 2024, the South Korean state formally abandoned plans for privatizing HMM.
BOX RATES NOW FOUR TIMES HIGHER THAN PRE-PANDEMIC
Container freight rates continue to trend upwards with Q3 looking like it will be one of the most profitable quarters in liner history with July generate rate increases appearing to be taking hold. Levine highlighted how the cost to ship a container of Weber gas grills from China to the US has skyrocketed and is now five times higher at $30 per grill compared to $5.60 last year, and less than $5.30 in June 2019. Typically, ocean freight costs account for around 1% of a grill’s price, but now they represent about 6%, according to Levine. “This spike may force importers to choose between absorbing these costs or passing them on to consumers,” Levine suggested. In recent weeks, mirroring the pandemic era, there have been many profit warnings from retailers around the world citing high shipping costs.