In response to escalating threats, half of the container-ship fleet traversing the Red Sea and Suez Canal is avoiding the route, reveals data from Flexport Inc. The tally indicates that 299 vessels, capable of carrying 4.3 million containers, have either altered their course or are planning to do so. This marks a significant increase from a week ago and accounts for approximately 18% of global capacity.
The diversion of these journeys around Africa may extend travel times by up to 25% compared to the Suez Canal shortcut, leading to increased costs. The attacks, primarily executed by Yemen-based Houthis, have prompted concerns about the impact on global trade. A US-led task force aims to enhance security in this crucial waterway.
Despite efforts to broadcast neutrality, the conflict has disrupted maritime routes, with potential repercussions for consumer prices on various goods, including sneakers, food, and oil.
The figures from Flexport align with data from Swiss freight-forwarder Kuehne + Nagel International AG, indicating the scale of maritime disruption. Houthis have launched over 100 attacks on commercial ships in the past month, emphasizing the vulnerability of key trade routes.
Major shipping companies, including A.P. Moller-Maersk A/S, have adjusted their plans in response to the threats, contributing to a decline in arrivals into the Gulf of Aden and reduced Suez Canal transits. The diversions, combined with challenges such as a Panama Canal traffic limit due to drought, pose the risk of a potential 20% reduction in global shipping capacity.
While a US-led coalition has intercepted a significant portion of the attacks, the defensive strategy remains costly, and shipping insurance rates are on the rise. The prolonged Houthi attacks may increase pressure on the US to adopt offensive measures, heightening the risk of regional escalation.
For companies managing cargo on redirected ships, the task of tracking new arrival times has become a pressing challenge, requiring extensive efforts to stay abreast of these developments.
