Portuguese 
English 
Spanish 
3 min of reading 
0 comments 
Chinese Cars Cross the Red Sea Without Incidents, Saving Millions in Transportation and Strengthening Competition Against Japanese, Korean, and European Manufacturers
Since the end of 2023, crossing the Red Sea and the Suez Canal has become a huge risk. The Houthi militia from Yemen, backed by Iran, has been attacking and even sinking commercial ships. The main targets are vessels directly or indirectly linked to Israel. This has forced thousands of ships to divert to the Cape of Good Hope, a much longer and more expensive route.
The most important thing is that this scenario has generated additional costs in the millions and significant delays. However, since the summer in the Northern Hemisphere, one exception has caught attention: ships loaded solely with Chinese cars are crossing the area without any incidents.
No attacks, no diversions, nothing. The coincidence, in this case, seems unlikely.
-
An army of 4.66 million robots is already operating in factories around the world, and now the next target is repetitive human functions such as forklift operators, delivery workers, and assembly line workers, raising alarms for a new wave of silent replacement in the job market.
-
Novonor begins exit from Braskem with the sale of control to Shine I, and the operation impacts the financial market.
-
Suape Port is receiving R$ 15.8 billion to become the largest green hydrogen hub in Latin America — and a partnership with China promises an additional R$ 8 billion.
-
Petrobras robots dove nearly 3,000 meters deep and 201 km off the coast of Rio de Janeiro confirmed what geologists suspected — there is more oil hidden in the pre-salt of Campos.
Billion-Dollar Savings on the Short Route
Crossing through the Suez Canal is a valuable shortcut. The difference can be 14 to 18 days less of travel. Additionally, the cost per car transported drops by several hundred dollars.
On a ship with a capacity of 5,000 vehicles, the savings represent millions of dollars. The benefit also includes reduced pollutant emissions and less wear on the fleet.
Therefore, it is not surprising that recovering the route is a priority for manufacturers like BYD and SAIC Motor.
Data from Lloyd’s List Intelligence shows that, in June and July alone, at least 14 ships left China heading to Europe through the Red Sea.
All were loaded with Chinese automobiles. Meanwhile, companies from Japan, Korea, and Europe continued to avoid the region.
Sign of Tacit Agreement?
Neither China, nor Iran, nor the Houthis confirm any pact. However, the facts raise suspicions. Iran heavily relies on China as a buyer of oil, as nearly all production is destined for Beijing.
This relationship accounts for about 6% of the Iranian economy. Therefore, Chinese influence is significant.
Analysts like Daniel Nash from Veson Nautical believe that the Houthis may have received orders not to attack vessels carrying Chinese cars.
Even foreign-flagged ships, but with cargo of automobiles manufactured in China, crossed the zone safely. Interestingly, other Chinese vessels without this cargo still avoid the Red Sea.
Competition in the European Market
In Europe, the presence of Chinese vehicles is growing rapidly. In April, they already accounted for nearly 5% of sales, double that of 2023. S&P Global projects that this share could reach 10% by 2034.
In response, the European Union imposed tariffs of up to 35% on cars with Chinese state subsidies. This forces Chinese manufacturers to seek alternatives to maintain attractive prices.
Recovering the Red Sea route is one of those strategies. Logistical savings can alleviate the burden of tariffs.
Moreover, they strengthen the competitive position against Japanese, Korean, and European manufacturers, who continue to bear the high costs of the African diversion.
While Some Stop, China Advances
The difference is clear. Companies like Tesla, Volvo, Suzuki, and Michelin have faced shutdowns in Europe due to logistical delays related to the Red Sea.
Some factories had to halt production lines for days or weeks.
Meanwhile, the Chinese shipbuilding industry delivers enormous new Ro-Ro ships to BYD and SAIC. Each vessel can carry at least 5,000 vehicles, distributed across several decks.
Valued at over 100 million dollars per trip, these floating cities were designed to traverse this strategic route.
With information from Xataka.
-
2 pessoas reagiram a isso.