TOKYO -- The seizure of a cargo vessel in the Red Sea has rekindled concern over a long-standing threat to Asia's supply chains, as the Israel-Hamas war rages near a crucial choke point for international shipping.
Analysts and companies note, however, that there are no easy alternative routes and that for now, many ships are likely to continue plying those waters despite the risks.
"The Red Sea is the most balanced route to take from Europe to Asia, as it is the shortest and the most cost-effective in terms of fuel and tolls," said a spokesperson for Nippon Yusen, also known as NYK Line, the Japanese operator of the seized ship.
The seizure of the hulking automobile carrier Galaxy Leader by Yemen-based Houthi militants was first reported on Sunday. As is common in the world of global transport, the ship has a complicated background. It flies a Bahamas flag, it is registered to an Isle of Man-based company linked to another from Israel, and it was chartered by Nippon Yusen.
The ship has been taken to Yemen, the Isle of Man-registered owner Galaxy Maritime told media. Nippon Yusen told Nikkei Asia on Tuesday that it had no new information about the fate of the vessel.
Although Israel does not consider the ship Israeli, the Houthis took responsibility for the seizure and have vowed to continue targeting the country's shipping until it ends its military operation against Hamas in Gaza. Since Hamas militants stormed Israeli territory on Oct. 7, killing an estimated 1,200 people, Israel's counterattack has killed more than 13,000 Palestinians in Gaza, according to Hamas authorities.
For Nippon Yusen, the immediate concern is the welfare of the crew on the Galaxy Leader, the company spokesperson told Nikkei on Monday evening. "We are trying to confirm the safety of 25 crew members on board, but currently have no communication with the ship," the spokesperson said.
Japan confirmed earlier that the crew includes Bulgarians and Filipinos but no Japanese nationals.
The Nippon Yusen spokesperson added, "We will consider our move in coordination with our ship or cargo owners, but we will attach top priority to the safety of our crew members."
Japan's trade minister, Yasutoshi Nishimura, on Monday warned of potential supply chain disruptions following the hijacking. "Various goods, including automobiles, are transported along this route, which connects Europe and Japan via the Suez Canal," he told reporters. "There could be an impact on the Japanese economy, including supply chains."
There are already modest signs of an impact on global supply links. Reuters reported Tuesday that two commercial ships connected to the same maritime group had changed course in the Red Sea and the Gulf of Aden, citing shipping data and British maritime security company Ambrey.
But avoiding the area altogether would be difficult. According to the Suez Canal Authority, approximately 18,000 ships pass through the waterway each year. Data from the Japanese Shipowners' Association shows that 1,240 vessels operated by Japanese companies transited the canal in 2022.
The hijacking of the Galaxy Leader serves as a reminder of the risk of piracy and also calls to mind the disruptive 2021 blockage of the Suez Canal, when a massive container ship became stuck.
An analyst in Japan who spoke with Nikkei Asia -- but did not want to be named due to the sensitive, uncertain nature of the Galaxy Leader situation -- suggested the episode would mainly serve as a wake-up call. "It much depends on the decision of individual cargo companies, but in this kind of case, many ships will continue taking the same route with utmost attention, instead of changing routes immediately," he said, noting that the alternative is to sail around Africa via the Cape of Good Hope, which entails additional time and cost.
Takuya Matsuda, a researcher on international security issues at the University of Tokyo's Research Center for Advanced Science and Technology, points out that the threat is far from new. "Piracy has long been common in these waters, including the Gulf of Aden," he said. "In other words, there has been an enduring risk of encountering such an incident."
The Galaxy Leader seizure suggests there is only so much companies can do.
The Nippon Yusen spokesperson said the operator is "assuming that the seized ship was following what we call 'best practice,' which is mandatory for any of our ships going through risky waters. This includes [using] high-pressure water cannons to prevent pirates from climbing on to the ship, or scheduled group navigation with other companies' ships to deter attacks, or going thorough areas where we know a patrol ship is nearby."
The spokesperson added, "Unfortunately we have exceptions ... and we can't prevent every incident."
Nishimura, the Japanese trade minister, was optimistic that energy supplies would not be immediately affected, as crude oil tankers and ships carrying liquefied natural gas (LNG) to Japan do not sail through the Red Sea often. Japan relies on the Middle East for 80% to 90% of its crude oil imports, but most is transported through the Strait of Hormuz from the Persian Gulf.
Nippon Yusen echoed that assessment, while saying that the type of goods transported depends on the season, and that some oil headed for Japan from places other than the Middle East does go through these waters. The company spokesperson also noted that LNG bound for Europe would also likely need to pass through the area, and that LNG shipping has been relatively active since Russian pipeline supplies to Europe were curtailed by the war in Ukraine.
For now, the Houthi threat will loom over the shipping industry, amid questions over the militants' strategy and whether they will take further action.
Matsuda said it is "unlikely that the Houthi forces carried out the seizure with a broader objective in mind," and even unclear whether they intended it "as a contribution to the Israel-Hamas war."
"It is premature to say that this incident indicates an escalation of the ongoing conflict in the Middle East," he said.