Has China cut a deal with Houthis? Its car cargo sailing through Red Sea, others still taking a detour

Unlike other cargo ships, China is shipping its automobiles to parts of the world via the Red Sea and the Suez Canal, even amid the Iran-backed Houthi group's continued aggression in the region that has forced merchant vessels from other countries to take a different route.

An analysis by Lloyd’s List Intelligence, a British maritime information service, has said that at least 14 car-carrier ships passed through the Red Sea and Suez Canal from China to ports across Europe last month.

The voyage occurred despite Houthis using drones, grenades and gunfire to sink two cargo ships last month. The terror group says that its attacks are motivated by solidarity with Gazans in Palestine.

Why is China getting special treatment?

Shipping analysts believe that the Chinese government has reached an understanding with the Houthis or Iran not to harm car-carrier ships from China.

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Daniel Nash, associate director of valuation and analytics at Veson Nautical, told the New York Times, "China has found a way to deal with the Iran-backed Houthi rebels, and they have been told that their ships will not be targeted."

Travelling through the Red Sea and Suez Canal saves 14 to 18 days on each round trip between Asia and Europe, compared to the longer route around Africa. This shorter passage cuts down on fuel, crew expenses, and overall shipping costs by several hundred dollars per car.

What are the other routes?

Houthi rebels in Yemen, seeking to stop Israel’s offensive against Hamas in Gaza, are attacking cargo ships plying the waters connecting Asia with Europe and the United States, forcing traffic away from the Suez Canal and around the tip of Africa. The disruption is causing delays and driving up costs, at a time when the world has yet to vanquish a resurgence of inflation.

Escalating Houthi threats have triggered rerouting of global shipping via the Cape of Good Hope, with far-reaching consequences, from elevated freight and insurance costs to extended delivery times, emissions spikes, humanitarian delays, and regional port shutdowns. Governments and shipping firms are responding with naval protection, international coordination, and structural adaptations to safeguard vital trade routes.