Cosco Halts Shipments to Israel Amid Yemeni Operations: Impact on Trade and Market Dynamics
Chinese state-owned shipping giant Cosco (China Ocean Shipping Company) has made a significant announcement, suspending all shipments bound for Israel. This decision aligns with a growing trend among shipping companies in response to Yemeni operations in the Red Sea.
Cosco holds a prominent position as the fourth-largest shipping firm globally, commanding an 11% market share in trade. The company had previously launched a new shipping route last year to transport China-made vehicles to Israel through the port of Eilat (occupied Umm al-Rashash). This move positioned Cosco as a key competitor to the Israeli ZIM shipping company, which had already rerouted its vessels away from the Red Sea two months prior due to increased shipping rates related to Yemeni operations.
The economic repercussions of Cosco’s decision are expected to be significant for Israel, given its status as a major player in global shipping and trade. Notably, the company’s entry into the Israeli market had been part of a broader trend where Chinese companies saw Israel as a gateway to Europe, particularly as the Chinese car industry experienced substantial growth.
In the first two months of 2023, Israel emerged as the third-largest destination for Chinese automobile exports. China-made vehicles constituted 17.47% of all deliveries in the Israeli market by late last year, marking a substantial increase from 4.8% in 2022. Furthermore, Chinese vehicle brands, including Teslas manufactured in China, dominated the electric vehicle sector in Israel with a commanding 70% market share.
Last year, it launched a new shipping route to deliver China-made vehicles to “Israel” through the port of “Eilat” (occupied Umm al-Rashash), becoming one of the top competitors to the Israeli ZIM shipping company, previously dominating this business. ZIM had also rerouted its vessels away from the Red Sea two months ago and hiked shipping rates over the Yemeni operations.
The geopolitical context surrounding these developments involves ongoing tensions between Israel and Gaza. In response to Israel’s actions, Yemen announced measures last November aimed at pressuring the United States and Tel Aviv to end the conflict. These measures included striking Israeli targets in occupied Palestine, particularly Eilat, and imposing a ban on all Israeli, Israeli-affiliated, and Israel-bound ships from crossing the Red and Arabian Seas. Failure to comply with these restrictions could result in vessels becoming targets for the Yemeni Armed Forces.
It’s crucial to note that Yemen has consistently emphasized that its operations are specifically targeted at the mentioned vessels, ensuring the safety of other maritime traffic. The Yemeni government has vowed to continue its actions until the war on Gaza comes to a halt. Against the backdrop of these geopolitical dynamics, Cosco’s decision to suspend shipments to Israel adds another layer of complexity to the evolving situation in the region.
Since “Israel” launched its brutal war on Gaza, the United States has been working discreetly to prevent the outbreak of a more extensive war involving multiple countries. On the other hand, Washington has also shot down all efforts to end the aggression, including the vetoing of several UNSC resolutions, which garnered majority backing, calling for a ceasefire.
In response to the ongoing genocide in Gaza and in support of its besieged people, Sanaa announced last November the launching of a set of measures against the Israeli entity, to pressure the US and “Tel Aviv” to end the war.
The measures included striking Israeli targets in occupied Palestine, mainly “Eilat” (occupied Umm al-Rashash), and banning all Israeli, Israeli-affiliated, and “Israel”-bound ships from crossing the Red and Arabian seas, with a consequence of becoming targets to the Yemeni Armed Forces if they failed to comply.
Meanwhile, Sanaa repeatedly stressed that its operations will only affect the mentioned vessels, confirming that navigation is completely safe for all others while vowing that attacks will not stop until the war on Gaza stops.