Houthi attacks have rendered Eilat Port unprofitable, operator says

Since the launch of the U.S.-Israeli military operation in Iran on Feb. 28, the port has registered, on average, the arrival of a single cargo ship per month, bringing in about 4,700 new consumer vehicles.

By JNS

Maritime traffic disruptions in the Red Sea due to Yemen’s Iranian-backed Houthi militia have rendered Israel’s southernmost port unprofitable, Hebrew media reported on Wednesday.

The Eilat Port saw an annual revenue of about 240 million shekels ($79 million) before December 2023, when the Houthis began disrupting maritime traffic, according to Ynet.

The number of consumer vehicles coming in through the port, which account for most of its traffic per the Calcalist website, has since dropped by about 75%, according to the report.

The ports of Haifa and Ashdod have taken over the traffic diverted from Eilat, which many shipping companies now deem too dangerous to use, according to Ynet.

However, shipping from eastern Asia to Eilat is cheaper than to Israel’s Mediterranean ports, and the extra cost will lead to price increases for consumers, according to an Eilat Port spokesperson.

The port, which is operated by Papo Shipping and owned by the Nakash brothers through Eilat Port Company Ltd., has waived up to 90% of some fees in an effort to attract cargo ships.

Since the launch of the U.S.-Israeli military operation in Iran on Feb. 28, the port has registered, on average, the arrival of a single cargo ship per month, bringing in about 4,700 new consumer vehicles.

This level of activity does not generate profit and is barely sufficient to cover the port’s operating costs, a port official told Ynet.

By comparison, in the final quarter of 2022, more than 70,000 consumer vehicles were offloaded at the port, according to Calcalist.

The port has about 100 employees and 20 personnel responsible for security and maintenance, according to Ynet.

Papo Shipping is seeking an extension of its concession for operating the port, which is due to end in 2028, in the hope of recouping losses once the traffic artery is secured, according to the report.

Houthi forces last week announced they’d captured the strategic island of Perim in the Bab al-Mandab strait, at the mouth of the Red Sea.

The takeover followed the departure from he island of forces allied to the UN-backed, Aden-based government in Yemen, AFP reported.

This was the latest in a series of gains by the Houthis along Yemen’s west coast in recent days, including their capture of the port city of Mocha.

Saudi Arabia, which backs the internationally recognized Yemeni government, launched air raids on Houthi positions in Mocha on Friday.

Oil prices have risen to more than $100 a barrel as the fighting in Yemen has escalated.

Iran welcomed the Houthi gains in an official statement on Friday.

Earlier last week, the Houthi rebel leaders said they’d driven out the “Saudi enemy” troops from six districts in the Taiz and Hodeidah regions, captured 4,500 square miles, targeted “seven military divisions of the Saudi enemy’s forces” and said this caused the “killing, capture, and wounding” of hundreds of soldiers, The Guardian reported.