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Report: COSCO Quits Serving Israel

Cosco boxship
File image courtesy Kees Torn / CC BY SA 2.0

Published Jan 7, 2024 7:46 PM by The Maritime Executive

World-leading shipowner and number-four ocean carrier China COSCO has canceled all service to Israel, joining its subsidiary OOCL. 

OOCL suspended services to Israeli seaports in mid-December, citing unspecified "operational issues." Shipping from Asia to the Eastern Mediterranean has been seriously disrupted by Houthi rebel attacks on merchant vessels in the Red Sea; so far, no COSCO-affiliated vessels have been hit or hijacked, and none have reported a near miss - unlike Maersk and CMA CGM, which have both been targeted multiple times.

The share of container lines transiting the Red Sea has gradually diminished since November, and at this point most boxships are diverting around the Cape of Good Hope. According to Ryan Petersen of digital forwarder Flexport, 95 percent of the boxships that would ordinarily pass through the Suez Canal and Red Sea are now taking the long route around Africa's southernmost tip. This is a nontraditional choice, and it adds about 10 days onto a typical Asia-North Europe voyage. The only other time in recent memory when east-west traffic diverted to the Cape route at scale was when the container ship Ever Given grounded in the Suez Canal, and that interruption was resolved within six days. 

Israeli news outlet Globes first reported the decision. China COSCO has not made a formal announcement or issued a service bulletin, and the news could not be immediately confirmed. 

Globes noted that COSCO's departure will be significant for Israeli carrier ZIM, which will lose access to cooperative service agreements with COSCO from the Far East to Israel. ZIM will now have to make other arrangements, likely raising costs for Israeli shippers. 

Unlike the other top-five container carriers, China COSCO also has fully-developed business interests in the tanker, bulker and gas-carrier markets. When including ships of all kinds, it owns the largest merchant fleet in the world, and most of its vessels are not container ships. As of Sunday, several identifiable COSCO vessels were still operating near Houthi-controlled waters. 

China COSCO is also the primary shipowning arm of the Chinese state. So far, China's government  has taken no action against Houthi forces or intervened in their attacks on shipping. Last week, Beijing refrained from joining an international statement of condemnation of Houthi attacks.