Since Israel has been at war with Hamas, cargo ships bound for Western countries through the Red Sea’s Bab al-Mandab Strait have come under pirate and missile attack by Yemenite Houthis.
You don’t have to grasp the complicated geopolitics to understand the immense impact: Statista conservatively estimates that 80 percent of the trillions of dollars’ worth of goods shipped around the world every year are transported by ships.
We all were affected by the supply-chain crisis during the Covid pandemic. But that was mainly a personnel problem. Today’s crisis stems from physical and cyber threats.
Diverting ships from the new danger zone means everything takes longer and costs more to deliver. Shipping prices per container roughly quadrupled from December to January.
“The repercussions are quite extensive,” says Ami Daniel, founder and CEO of Tel Aviv-based maritime intelligence company Windward.
“The collective vessel market share of MSC, Hapag Lloyd, and Maersk, all of which have rerouted vessels away from the area, accounts for approximately 60% of global trade. Many of the impacted vessels previously heading to Europe from Asia via the Red Sea are now sailing around the Cape of Good Hope in South Africa, likely adding 10 to 14 days of travel time.”
Furniture giant Ikea has already warned of supply shortages, while a Tesla factory in Germany and a Volvo factory in Belgium announced production slowdowns due to “considerably longer transportation times” delaying the delivery of essential parts. This will, of course, raise the cost of the vehicles.
Shoring up maritime security is more essential than ever, necessitating a large range of solutions.
“It’s a worldwide problem, and we need worldwide collaboration to keep trade routes open,” says Nir Gartzman, cofounder and managing partner of theDOCK maritime innovation hub in Haifa.
Gartzman will present onstage in Las Vegas in February at Manifest, a conference on supply chain and logistics. Among the Israeli maritime companies expected at Manifest are Windward and theDOCK portfolio startups WaveBL (digitized trade documents), Hoopo (fleet tracking), Conbo AI (port and terminal resource optimization) and DockTech (digital infrastructure for faster, safer seaport operations).
“Israel has already been a significant player in vessel security for decades,” Gartzman tells ISRAEL21c, explaining that former members of elite Israeli military units often work as security guards on cargo and cruise ships in high-risk regions.
In the tech realm, the Israeli maritime sector is expanding existing activities. He says more startups are sure to fill the growing need despite Israel’s current security challenges.
“I know it sounds like a cliché, but Israeli tech delivers no matter what. We have been in an ‘innovate or die’ situation for 75 years and that’s why we are so fast and creative,” says Gartzman.
There are two major players in dedicated maritime cybersecurity: CyberOwl of England and Singapore, and Cydome of Tel Aviv. Founded in 2018, Cydome provides risk management, detection and alert capabilities to dozens of vessels.
“Ships are becoming more connected,” says Shahar Dumai, head of marketing. “Until two years ago, bandwidth for ships was 1.5mg, like a dialup from the 1990s. Satellites are now providing bigger bandwidth for ships at less cost, so the attack plan is wider.”
Recent hacks that shut down ports in Australia and Japan, and another targeting shipping giant Maersk, have led to increased demand for cybersecurity systems purpose-built for maritime environments, Dumai tells ISRAEL21c.
Carnival Cruises was fined more than $6 million following a series of cybersecurity breaches between April and July 2019, and estimated receiving more than a million cyberattack attempts per day, says Dumai, while the Port of Los Angeles reports 40 million attempts per month.
“Our solution addresses a real problem in an industry that is not tech-savvy yet,” says Dumai.
Cydome continuously protects all connected systems — navigation, cargo management, engine management — and helps shipping companies automate compliance with new cyber regulations.
“We founded this company with the passion to create full-spectrum protection for vessels, fleets, offshore facilities and ports, while making sure the team on board and on shore who monitor the cybersecurity status know exactly what to do,” says Dumai.
Cydome closed an $8 million Series A round in September. The company’s clients are mainly in Europe and it has offices servicing clients in Singapore and Japan.
Windward, a worldwide leader in big-data-based risk analysis and risk recommendations for ship operators, has become even more significant with the Houthi threat, says Gartzman.
Serving dozens of customers in Europe, the United States, Latin America, Australia and Singapore, Windward recently launched the Route Deviation (RDV) Exception solution.
RDV Exception provides early alerts of route changes caused by the geopolitical crisis in the Red Sea, enabling stakeholders to anticipate challenges and develop contingency plans so as to minimize the many negative ripple effects of delays and manage costs more effectively.
Daniel says Windward is “managing hundreds of thousands of containers at any point in time, helping customers know where the goods are and when they are going to arrive.”
This is critical information for all supply-chain partners, including logistics service providers, freight forwarders, cargo owners, shippers, container ports, terminals and liners.
“Our governmental customers are now required to operate very far from home. If a navy or coast guard was looking at incoming ships, they’re now using our technology to a larger extent to identify, monitor and manage risks, patterns and anomalies 5,000 miles away from home,” says Daniel.
Tel Aviv-headquartered navigation and collision avoidance company Orca AI, one of three leaders in this sector worldwide, has signed its first deal with an unnamed “prominent navy” to implement its vision-assistance technology.
Orca AI’s situational awareness platform uses machine learning and computer vision to enhance navigational safety in low-visibility conditions and high-risk regions where traditional systems may fall short.
At times, navy vessels must deactivate radar and other electronic systems to maintain operational security. Orca AI’s technology allows target detection without relying on radar, explained Yarden Gross, Orca AI’s cofounder and CEO.
“Orca AI enables proactive threat mitigation for military assets from diverse threats such as piracy, terrorism and airborne/marine drones by empowering personnel to anticipate and counteract these risks, bolstering vessel security and protecting crews and sensitive cargo,” Gross said.
Captain’s Eye of Haifa secures merchant vessels with AI vision technology that can detect and alert the crew and the onshore ship management company to safety and security events, including accidents, environmental pollution, fires and leakages, in real time.
CEO Uri Ben-Dor, a retired naval captain, said the Captain’s Eye system is adjustable to each client’s needs. “We are doing pilot projects with top-10 shipping companies,” he tells ISRAEL21c.
Japanese shipowner Mitsui OSK Lines (MOL) will install Captain’s Eye in the cargo holds of 10 new liquid natural gas-fueled car carriers to provide early smoke-detection capabilities. Images of the cargo hold can be viewed from both the vessel and on land, leading to a faster response in case of fire.
Jerusalem-based shipping logistics company Freightos offers a booking and payment platform for global carriers, trade companies and importers.
“As a result of that, we have a lot of data providing real-time visibility into how the crisis is impacting various organizations, pricing and transit times,” says Freightos CMO Eytan Buchman. “We’ve seen a massive spike in interest for that data, three times higher this week than a month ago.”
Freightos data is helping multinationals like Mitsubishi and UPS make better decisions based on real-market conditions in specific shipping lanes.
“Maybe instead of shipping from China to the US East Coast they can ship to the West Coast in a shipping lane that goes directly across the Pacific,” says Buchman.
“We provide tools to trace out and book those shipments and help companies shift between air and ocean freight when it makes more sense.”
It all comes down to security, he says.
“Security for ships has always been an issue. Ironically, the Horn of Africa was always the less safe route and right now it is safer.”