Repeated attacks by Yemen’s Houthi rebels on container ships in the Red Sea have caused sea freight rates to skyrocket. Meanwhile, the UN Security Council also condemned the attacks.
After the missile attacks and attempted hijackings of container ships in the Red Sea, the cost of sea freight is skyrocketing.
Rates between Asia and Northern Europe have more than doubled this week to over $4,000 per container, according to international freight booking platform Freightos. Between Asia and the Mediterranean they rose to $5,175.
Some major shipping companies have announced rates of over $6,000 for Mediterranean shipments by mid-month. Surcharges ranging from $500 to $2,700 per container could further drive up overall prices, Freightos said.
A third of the world’s Container freight shipped via route
Egypt’s Suez Canal connects the Red Sea with the Mediterranean and is the fastest route to transport fuel, food and consumer goods from Asia and the Middle East to Europe. About a third of the world’s containerized cargo, including toys, tennis shoes, furniture and frozen foods, is shipped via this route.
In Yemen, the Iran-backed Houthi rebels have declared solidarity with the radical Islamic Hamas in the Gaza Strip and have repeatedly attacked ships off the coast they control. Maersk, Hapag-Lloyd and other shipping companies have announced that they will avoid the Red Sea.
So far more than 180 ships have been diverted
By Wednesday, more than 180 ships had already been rerouted around the South African Cape of Good Hope to avoid the attacks. This increased travel times by seven to 20 days, said supply chain management technology company project44.
According to the United Nations, 18 shipping companies are now diverting their ships and letting them sail around Africa instead. The diversion via South Africa was intended to reduce attacks on ships, said the head of the International Maritime Organization (IMO), Arsenio Dominguez.
International military coalition to protect the Merchant shipping
Although rates have soared, they are still well below the pandemic-related record of $14,000 per container for shipments from Asia to northern Europe and the Mediterranean.
Yemen lies on the Bab al-Mandeb Strait between the Red Sea and the Gulf of Aden. In order to protect merchant shipping, the US announced in mid-December that it was forming an international military coalition. According to the US Department of Defense, more than 20 countries now belong to this group. Germany is not yet one of them, but is considering joining, according to the Federal Ministry of Defense.
UN calls for an end to Houthi rebel attacks on ships
Meanwhile, the UN Security Council also called on Yemen’s Houthi rebels to stop their attacks on shipping in the Red Sea and the Gulf of Aden. These are illegal and threaten regional stability, freedom of navigation and global food supplies, said Chris Lu, US representative to the United Nations (UN). At the same time, the council called for the release of the Japanese-operated, Israeli-linked cargo ship “Galaxy Leader” and its crew, which the group seized on November 19.
The Iran-aligned Houthis, who control much of Yemen, have fired drones and missiles at more than 20 ships since November 19.