The cost of transporting goods by sea between Asia and Europe has skyrocketed during the last week, tripling on some routes, as attacks by Yemen’s Houthi rebels against ships in the Red Sea and in the Gulf of Aden.
About twenty shipping companies have already decided to avoid the Suez Canal and go around Africa to get from Asia to Europe, a journey that lengthens trips by around ten days. 15% of world maritime trade passes through the Red Sea.
Although attacks by Houthi rebels began in November, freight increases had been moderate until the end of the year. However, rates have multiplied in the first days of 2024.
The cost of a 40-foot container (12.19 meters long, 2.44 meters wide and 2.59 meters high) to transport merchandise from China and East Asia to Northern Europe through the Canal Suez has gone from $1,590 on December 29 to $4,274 now, an increase of 169%, according to data from the global logistics platform Freightos.
In the opposite direction (from northern Europe to eastern Asia), the price has risen 142% (from $312 to $756).
115% increase on the East Asia and Mediterranean route
On the route between East Asia and the Mediterranean, the cost has gone from $2,401 per 40-foot container to $5,164 in just one week, an increase of 115%.
In the opposite direction (from Mediterranean ports to China or East Asian countries), the rate has increased by 237% (from $169 to $569).
Although more moderate, this strong increase is also seen in the global index prepared by Freightos (Global Container Freight Index) and which takes into account other routes, for example those of the Pacific.
The index has gone from $1,341 at the end of 2023 to $2,490 now, which implies an increase of 85%.
A similar evolution is shown by the index prepared by the consulting firm Drewry, specialized in maritime transport (WCI Composite Container Freight Benchmark Rate).
The index rose 5.7% in the first week of December; 4.1%, in the second; and 9.2%, in the third, but it has shot up 60.7% in the last two weeks (since December 21) going from 1,661 dollars to 2,670.
Eighteen shipping companies avoid the Red Sea
At least 18 shipping companies have decided that their ships will avoid the Red Sea and cover the journey between Asia and Europe around southern Africa, according to data offered mid-week by the secretary general of the International Maritime Organization (IMO), Arsenio Domínguez. , during a speech before the UN Security Council.
The Danish shipping company Maersk, one of the largest in the world, suspended its routes through the Red Sea again this Tuesday after the attack suffered last weekend by one of its ships.
Attacks by Houthi rebels have proliferated in recent days. Last Wednesday, this group claimed responsibility for an attack against a ship of the French shipping company CMA CGM off the coast of Yemen.
That same day, the US Naval Central Command reported that the Houthis had launched two ballistic missiles that hit near several ships in the southern Red Sea.
A dozen countries, led by the US, have demanded that the rebels end their attacks “immediately.”
By Usmana Kousar
