The Wall Street Journal has a useful new article on how safe transit on the seas has been under attack for some time. Yet the West (like so many other problems resulting from arrogance and neglect) effectively ignored the erosion of navigation safety despite the obvious importance of global supply chains and is not able to do much about it any time soon.
One might read this piece as an effort to shift blame away from how the Biden Administration has demonstrated its impotence against a third tier military, the Houthis. But as we’ll show, the bigger picture does not exculpate Biden and his team.
And while we are on the topic of the Houthis, that sorry picture is not getting any better:
A single Houthi missile got through the AEGIS umbrella? Not a good sign. https://t.co/J7MVFQNMCA
— Big Serge ☦️🇺🇸🇷🇺 (@witte_sergei) February 1, 2024
🔴 A Houthi strike has hit a British operated ship in the Red Sea in the latest targeted attack against commercial shipping, according to reports.
— The Telegraph (@Telegraph) February 1, 2024
And the Houthis are ready to move up the escalation ladder:
— tim anderson (@timand2037) January 31, 2024
The US effort to pretend that our embarrassing outreach to China to get them to Do Something about the Houthis via Iran (as if the Houthis are Iran’s minions, another officialdom-and-media-promoted misperception) is yet more propaganda:
Iran's Foreign Ministry refuted Western media reports that China called on Tehran to pressure Yemen to halt its attacks on ships in the Red Sea (which aim to stop Israel's genocide in Gaza).
Iran said the story is false. More Western media disinfo.https://t.co/iEzCU3COst
— Ben Norton (@BenjaminNorton) February 1, 2024
I have no idea how important these particular cables are, but if the Houthis are able to cut one or ones that carry meaningful traffic to Israel, and not so much to neighbors (as in they might be affected but less seriously), this could be a big blow.
In the meantime, the US and its allies engage in response theater. We already know convoys, even ones with ships with missiles on board, have not been able to dent the Houthi threat. Yet we see this empty display (hat tip BC), Greek frigate to be dispatched to Red Sea is purely for supportive and defensive role. And the text in flight.com confirms that this is a frigate, as in one.
Now admittedly a lot of commentators, including the Journal, are overegging the pudding by focusing on the very recent increase in freight rates, as opposed to a somewhat longer period. That vies is still less than pretty but short of being dire. From Statista:
And more important, rates were much higher in 2022, so this increase, although alarming, is not even within hailing distance of being make-or-break, in terms of costs. From Europe-Cities, in August 2022:
After having broken through the ‘psychological’ threshold of 10 thousand dollars at the end of July, the decline in freight rates of container transport by sea from China to Italy continued, until this week brought them precisely to an average quota of 8,879. dollars for sending a 40-foot box from Shanghai to Genoa.
In fairness, the Journal points out, but much later in the article, that the real deal killer for Red Sea shipping is insurance costs:
Even if those ships can evade Houthi missiles, they can’t hide from insurers. The rate for war insurance through the Red Sea, once a tiny percentage of the total value covered, has ballooned to 1%, a difference that many shippers deem cost-prohibitive. The 10,000-mile-long alternative, circumnavigating Africa, is so fuel-intensive that cargo ships pay steep climate taxes on arrival in Europe and risk scoring failing grades on the International Maritime Organization’s carbon report index.
However, I have not yet seen much discussion of the impact of greater transit times on supply chain, and whether factor is generating any production problems. With tightly-coupled supply chains, there may be some cases of “for the want of a nail” type problems compounding into more serious problems.
Now to the main event, the Journal account of the decline in safety of commercial navigation over time. The article does correctly point out that freedom of the seas, as a reality as opposed to an aspiration, is a relatively recently development. This article depicts it as a result of the US post-World War II order. I am not sure that is accurate. The period right before World War I was also a high tide for international trade. The gold standard broke down during World War I because gold balances could no longer be shipped safely between states…which implies that was normal in the preceding decades. Any informed commentary appreciated.
The Journal story explains that the modern erosion of safety goes beyond the effectiveness of Somali pirates. The fact that the US is on close to non-speaking terms with Russia and China is a factor. Even though the US treated both as geostrategic rivals, there was still enough in the way of pragmatism in the US leadership so as to be able to cooperate with each country on areas of mutual interest. But as soon as the Biden Administration took office, it upped the hostility with both countries (recall our stunning rudeness at the summit with China in Alaska in March 2021). The piece begins with ritual whining that “American vessels aren’t welcome across one of the world’s most vital transport lanes” and how Russia has allegedly made the Black Sea unsafe. But its then gets to the bigger picture, for instance showing the changes in sea routes over the last year:
Until the 20th century, trading nations competed in blood for the right to ship merchandise to foreign ports; these days they compete on price and quality.
Ships handle more than 80% of global goods, according to the U.N.
Not long ago, the world’s most powerful navies cooperated to secure the seas. When Somali sailors seized two Chinese vessels in 2008, Beijing sent warships to help the U.S. patrol the Horn of Africa. After the Cold War, Russia teamed up with the U.S. military to clean nuclear waste from the Arctic Sea, before melting ice opened new shipping possibilities. For now, there is little chance those three world powers could summon common cause.
The U.S. can still call on allies in Europe or Japan, whose navies once spanned the globe. But today they are lightweights with few warships or skilled personnel they can mobilize in a crisis: The British navy has fewer sailors than it did during the Revolutionary War 250 years ago, when its total population was one-seventh its current size. The U.S. Navy, sidelined during decades of counterterrorism campaigns, is stretched securing not just shipping lanes but also undersea data cables and gas pipelines that have become equally important to economic output.
This discussion envisages navies as the means of responding to threats to shipping. But anyone who has been paying close attention to the Houthi attacks, or the Ukraine conflict, recognizes that the old paradigms of how to wage war have been disrupted by ISR and long and intermediate range missiles, particularly precision missiles. Surface vessels are sitting ducks. We’ve seen in the Red Sea how they exhaust their supply of missiles and then have to be resupplied. Worse, and this is a US own goal. First, see this section of a late 2023 article in Defense News:
In early October, the U.S. Navy reloaded a destroyer’s missile tubes using a crane on an auxiliary ship pulled alongside the destroyer, rather than a crane on an established pier.
Reloading a vertical launching system, or VLS, is a challenging maneuver, given the crane must hold missile canisters vertically, while slowly lowering the explosives into the system’s small opening in the ship deck.
It’s also a maneuver the Navy cannot yet do at sea. This demonstration took place while the destroyer Spruance was tied to the pier at Naval Air Station North Island, as a first step in creating a more expeditionary rearming capability.
But in the near future, that same evolution between a warship and an auxiliary vessel could take place in any harbor or protected waters around the globe. One day, it may even take place in the open ocean, thanks to research and development efforts in support of a top priority for the secretary of the Navy.
Translation: reloading in the open seas is vaporware. So US surface ships can’t respond effectively to opponents who can fire lots of cheap missiles or even drones. And that’s before getting to the US procurement propensity to prefer fewer, pricey and fussy weaponry to cheap, rugged, and ample, made even worse by the fact that the US never took air defense seriously. So not only do we have trouble maintaining continuity of defense due to ships needing to run back to port to get new weapons, we don’t have enough either.
Due to the state of search, I cannot verify when vertical launching systems became prevalent in the US navy. I dimly recall Larry Johnson discussing it in an interview, and if my memory is correct, before 2000 older designs were common, and that among other things meant missiles could be brought to ships by air. Any reader corrections or confirmation appreciated.
Second, even if our approach to shipping defense were sound, it’s also woefully underpowered:
At the time , the U.S. Navy boasted about 7,000 ships….
Today, America’s navy can field fewer than 300 ships and the world’s largest fleet belongs to Beijing, which is reinforcing its unilateral claim on the vast South China Sea by creating and fortifying artificial islands. Stavridis called it “a preposterous claim that has been rejected by international courts,” but he predicted China will continue “and challenge anyone seeking to conduct freedom of navigation.”
The article contains more hand-wringing about how the Houthis are picking and choosing who they target, and Chinese and Russian ships are not on that list.
The story ends with a bleat about the threat to Our Way of Life:
“We really have to think about freedom of navigation and the connection between that and global trade,” said Swedish Foreign Minister Tobias Billström.
“As a nation very much dependent on global trade, we believe that global trade is the way forward,” he said. “Without global trade, and the possibility of maintaining the benefits of global trade, this world would be a much more difficult one for us to live in.”
It would seem obvious that advanced economies need to kick their extended supply chain habit. The CO2 cost of shipping argues against it. The US decision to get aggressive with Russia and China would have seemed to imply, as a matter a prudence, reducing international interdependence. The impact of Covid lockdowns and surges on international commerce should have been a wake-up call. With all the blather about reshoring, talk exceeds action. After all, restructuring production is hard and often requires investment. So why not kick the can down the road and hope you can foist this problem on your successors?
It seems on this front, like so many others, change won’t happen until it is forced on the incumbents, which means the results will be worse than necessary. Welcome to late-stage capitalism.