Eilat Port to lay off half its staff due to Houthi attacks stymieing shipping trade

Histadrut Labor Federation says terminal’s administration notified its 120 workers that 60 would be fired, accuses managers of taking advantage of war

Ships in the Eilat port, Red Sea, on January 3, 2024. (Yehuda Ben Itach/Flash90)
Ships in the Eilat port, Red Sea, on January 3, 2024. (Yehuda Ben Itach/Flash90)

Half the workers at Eilat Port are at risk of losing their jobs after the southern seaport took a major financial hit due to the crisis in Red Sea shipping lanes, Israel’s main labor federation said on Wednesday.

Eilat sits on the northern tip of the Red Sea and was one of the first ports to be affected as shipping firms rerouted vessels to avoid attacks by the Iran-backed Houthi terror group in Yemen.

The Histadrut Labor Federation, the umbrella organization for hundreds of thousands of public sector workers, said port management had announced it intends to fire half of the 120 Eilat Port employees. The dock workers will hold a protest on Wednesday, it said.

Officials at the port did not immediately respond for comment.

Eilat, which primarily handles car imports and potash exports coming from the Dead Sea, pales in size compared to Israel’s Mediterranean ports in Haifa and Ashdod, which handle nearly all the country’s trade.

But Eilat, which sits adjacent to Jordan’s only coastal access point at Aqaba, offers Israel a gateway to the east without the need to navigate the Suez Canal.

New imported cars are seen at a parking lot in Eilat port on January 3, 2024.(Yehuda Ben Itach/Flash90)

In December, Eilat Port’s chief executive told Reuters that there had been an 85 percent drop in activity since Houthis began their attacks on ships in the Red Sea. He said at the time they may have to furlough workers should the crisis continue.

“It would have been right for the company at this time to have embraced the workers and their families, and not chosen the easy way of attempting mass layoffs,” said Eyal Yadin, chairman of the transportation workers union, in a statement on Wednesday. “We won’t be a part of this.”

Nir Eisenberg, director of the Maritime Division at the Histadrut’s Transport Workers’ Union, said, “The port management is trying to take advantage of the war situation and harm the livelihood of dedicated workers in the southern periphery.”

The Calcalist outlet reported that in 2023, 149,000 vehicles entered Eilat from the east, whereas since the beginning of 2024, there have been none.

Yemen’s Houthi rebels began attacking ships in the Gulf of Aden and the Red Sea last November, a campaign they say is intended to signal solidarity with Palestinians in Gaza amid the war between Israel and Hamas, which began with the terror group’s devastating October 7 assault on southern Israel.

The Houthi attacks have disrupted global shipping, forcing firms to reroute to longer and more expensive journeys around southern Africa. The cost of insuring a seven-day voyage through the Red Sea has risen by hundreds of thousands of dollars. Beyond economic damage, the attacks have also served to stoke fears that the Israel-Hamas war could spread to destabilize the wider Middle East.

While the group has claimed it only targets vessels owned by or connected to Israel, it has frequently targeted vessels with tenuous or no clear links to the country, imperiling shipping in a key route for trade among Asia, the Middle East, and Europe. Those vessels have included at least one with cargo for Iran, the Houthis’ main benefactor.

An RAF Typhoon aircraft taking off from RAF Akrotiri in Cyprus, for a mission to strike targets in Yemen, January, January 11, 2024. (Sgt Lee Goddard, UK Ministry of Defense via AP)

The alternative route to the Red Sea takes shipping around the southern tip of Africa, extending voyages to the Mediterranean by two to three weeks, which will add extra costs down the line, Israeli officials say.

The US put together an international coalition of naval powers to offer protection for ships in the Red Sea. Also, the US and UK began striking Houthi targets in Yemen in January, but despite this, the rebel group remains undeterred and capable of launching significant attacks.

The Houthis have also fired drones and missiles at Israel in a campaign they say aims to support Palestinians in the Gaza war, where Hamas is also backed by Iran. On Tuesday the Israel Defense Forces confirmed that a “suspicious aerial target” that struck an open area near Eilat the day before was a cruise missile.

Houthi fighters stage a rally against the US government designating Houthis as a terror group and against the US-led sustained airstrikes on Yemen, near Sanaa, Yemen, Thursday, January 25, 2024. (AP Photo/Osamah Abdulrahman)

Yemen’s Houthis claimed responsibility for the missile, which crossed into Israeli airspace from the direction of the Red Sea. No damage or injuries were caused, and according to the IDF, the missile was tracked by the Air Force throughout the incident.

It came as Houthis said they also targeted a fuel tanker in the Red Sea with naval missiles.

Eilat Port was privatized in 2013, and purchased by the Nakash brothers Joe, Avi, and Ralph through the Papo Maritime Ltd shipping company they own for NIS 122 million in an agreement that lasts until 2028 with an option to extend for another 10 years. Sources told the Globes outlet the Nakash bid was the only one submitted in the tender for the port.

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