The Suez Canal Authority recognizes a “significant” impact from the Houthi attacks in the Red Sea.
In three weeks in January 2024, sea freight prices more than doubled due to attacks by the Houthis, a Yemeni insurgent group, in the vicinity of the Bab el-Mandeb Strait in the entrance of the Red Sea, as well as the restriction on the number of daily ship transits through the Panama Canal.
“The Shanghai Containerized Freight Index (SCFI)13—an index that is made up of data collected from 15 different transportation routes—in the first three weeks of January averaged $2,114 per TEU, which is equivalent to (a 20 feet in length)”, reveals the Argentine Agency for Investment and International Trade.
As of January 24, 2024, the cost of freight registered an increase of 102 percent compared to December 31, 2023 or an increase of 103.1 percent if the interannual variation is observed, explains the entity in charge of promoting Argentine products in the world.
In the first three weeks of January of the year, the Freightos Baltic Index (FBX)11—a global freight transportation index—averaged a rate of $1,364 per TEU, representing an increase of 115 percent month-on-month and 24 percent year-on-year.
During the third week of December 2023, the Shanghai Containerized Freight Index sea freight rate was $1,046 per TEU. While the Freightos Baltic index was at $635.
The increase in maritime rates in both indices is largely explained by the conflict in the Red Sea and the drought in Panama, details the Argentine organization.
Regarding the first episode, the Houthi attacks on shipping vessels near the coast of Yemen have caused large shipping companies to suspend routes in this area and begin to look for longer and more expensive alternatives, such as passing through the Cape of Good Hope.
“The change of route prolongs the trip between 7 and 20 days, but also increases transportation costs,” according to the Argentine export monitor.
In addition, the incidents have resulted in the number of containers transported through the Red Sea having decreased by almost 70 percent when compared to the volume transported during November, it details.
In early November 2023, the Houthi rebels began bombing Israeli and American targets in support of the Palestinian group Hamas. Their attacks, which have extended to commercial traffic that ventures into the area, seek to provoke a collapse that forces Israel to stop its offensive in Gaza.
Opposite the one that provokes the Houthi attacks, a Yemeni insurgent group, in the vicinity of the Bab el-Mandeb Strait, at the entrance to the Red Sea, on the way to European markets through the Suez Canal.
The Suez Canal Authority recognizes a “significant” impact from the Houthi attacks in the Red Sea.
The Suez Canal and the Panama Canal are undergoing changes that force large shipping companies to rethink their usual itineraries.
“On the Panama side, the country is going through a historic drought due to the El Niño phenomenon, which has led the Panama Canal authorities to restrict the number of daily ship transits: this has caused long lines and waiting times. extended for vessels,” points out the Argentine Investment and International Trade Agency.
#crisis #Red #Sea #drought #shoot #price #maritime #freight
– 2024-05-07 14:11:36
