Red Sea turmoil disrupts UAE relocations and increases costs and delays

Increased costs and delivery times for shipments are causing significant problems for people moving to the UAE due to the turmoil in the Red Sea.

Attacks by Houthi rebels on shipping vessels in one of the world’s busiest maritime trade routes have forced operators to divert supplies by southern Africa and the Cape of Good Hope resulting in longer transit times.

Drone attacks and several tanker invasions have caused widespread chaos and a forceful response from coalition naval forces patrolling the region.

“The situation is causing some significant challenges, especially for people and businesses moving to and from the UAE,” said Craig Reilly, chief executive of the Dasa Group, an international moving company in Dubai.

“We’re seeing increased costs and longer waiting times for transporting household goods.

“The escalating conflict is a serious concern for the global economy.”

Suez Canal tanker transits have fallen by 14 per cent since the first Houthi attacks in late November. People relocating are expected to face additional significant port and freight costs, even if their household items are already at sea.

“We’ve informed our clients that anything leaving here now, or anything else, will incur a surcharge that goes straight to the port,” said Mr Reilly.

As for the UK, shipping costs could increase by $400 or $1,500, depending on where it is going to, he added.

“The [time] it takes for us to get containers to turn around and the supply of containers will dictate the cost going forward.”

Kuba, who did not want to give his full name, is a lawyer who moved to Dubai from Poland with his wife.

They are awaiting the arrival of their household items to move into a villa in Mira Oasis.

“We scheduled for everything to arrive by the end of January, about 30 to 40 days of transit,” he said.

“They packed all of our stuff on December 18 and then a few days later, we got a message saying unfortunately, due to the situation at sea, it would be delayed, with the arrival likely to be around February 22.”

The couple have been forced to pay for furniture in Dubai for their new home, and face having furniture they no longer need when their shipment eventually arrives.

“Unfortunately, it has since been delayed by an additional five days and will not leave Poland until January 24,” said Kuba.

Matt Stanley, a senior commodity broker at Starfuels in Dubai, said importers will be planning ahead of Ramadan to ensure vital goods arrive on schedule for one of the busiest times of the year.

“Usually, about this time of year, Gulf nations are importing a lot of wheat by the Red Sea, knowing Ramadan is coming up,” said Mr Stanley.

“That usually comes from Ukraine and goes through the Black Sea via the Suez, but there’s enough time to plan for the eventuality that it has to go via the Cape of Good Hope instead.”

Major shipping companies, including Europe-based MSC, Maersk, CMA, CGM, Hapag-Lloyd and Asia-based Cosco Shipping, HMM and Evergreen Line, have suspended shipping operations through the Red Sea.

“The big container lines are so huge and cumbersome that they have no choice but to reroute,” said Mr Stanley.

“If they have to pay a premium to get their goods into the containers they will, whether they pass that down to the end user will be down to each individual retailer.

“Supermarkets with a high market penetration will probably absorb the cost, but if you’re a sole trader, you’re going to pass that on,” he said.

There is a growing concern that if the Arabian Sea, positioned south of Saudi Arabia and west of India, is also affected, it could have far-reaching implications.

The area is crucial for a significant portion of the world’s oil supply, with any disruption having a global impact. The Houthi rebels, who control much of Yemen, are taking aim at vessels to apply pressure on Israel over its devastating war with Hamas militants in the Gaza Strip.

Tim Coffin, chief executive of Tristar Eships, a Dubai-based shipping service, said the industry was facing significant challenges.

“The Houthis’ belligerence in the southern Red Sea is interestingly coinciding with an uptick in piracy incidents from Somalia,” said Mr Coffin. “The whole region of north-east Africa and [the] southern Red Sea is now a high-risk area.”

The US-led Operation Prosperity Guardian was launched in December to ensure the safety of maritime traffic in the Red Sea, Bab Al Mandeb and the Gulf of Aden – one of the major choke points for global shipping.

Mr Coffin said that container ships were the most affected, with participants from every sector of the industry avoiding the Red Sea.

“We saw this in 2021 when the Ever Given container ship blocked the Suez Canal,” he said. “The disruption we’re seeing now is even greater.”