After attacks on ships in the Red Sea: sea freight prices skyrocket NASA presents supersonic aircraft without a sonic boom

Most major shipping companies avoid the Red Sea. The passage through the Suez Canal is one of the most important trade routes in the world, but has become dangerous: since the escalation of the conflict in the Middle East, Yemen’s Houthi rebels have targeted container ships. Since mid-November, they have attacked or attempted to hijack more than twenty ships with missiles and drones. In this way, the Houthis affiliated with Hamas want to put pressure on Western states that support Israel.

This appears to have been at least partially successful. At least on an economic level. According to the international freight booking platform Freightos, sea freight prices for a container have skyrocketed. Transport costs from Asia to Northern Europe have more than doubled to more than $4,000 per container. Between Asia and the Mediterranean they rose to $5,175.

Higher freight prices and hefty surcharges

Some shipping companies are going even further, such as France’s CMA CGM: from mid-January, transporting a 40-foot container between Asia and the Western Mediterranean will cost $6,000, up from $3,000 on January 1. Prices to the eastern Mediterranean, the Adriatic Sea, the Black Sea and Syria also rose sharply.

In addition, according to Freightos, there are sometimes surcharges of $500 to $2,700 per container that shipping companies have introduced. They would have to adjust their timetables, increase the size of their ships and take into account the increasing risk of traffic jams and bottlenecks.

After all: according to Freightos, forwarders are “better equipped than during the pandemic”. They would try to manage diversions and maintain container traffic. Even the highest prices of that time have not yet been reached, reports Reuters news agency. In 2021, these were $14,000 for a 40-foot container between Asia and Northern Europe and the Mediterranean.

There are already delivery delays

According to the United Nations, eighteen shipping companies no longer sail through the Suez Canal. These include Geneva-based MSC, Denmark’s Maersk and Germany’s Hapag-Lloyd. They guide their ships around the African continent. The diversion via South Africa is intended to reduce attacks on ships. But on this route, freighters travel one to three weeks longer, increasing fuel and personnel costs.

This has implications for global supply chains, which are closely timed. There is a risk of delivery problems and production downtime. The Suez Canal route is the fastest way to ship fuel, food and consumer goods from Asia and the Middle East to Europe.

According to a Reuters report, the attacks have already delayed the delivery of products destined for many companies, as the Suez route is used by major companies such as Ikea and Amazon. Up to a third of the world’s container freight moves through the Suez Canal, including toys, sneakers, furniture and frozen foods. (aargauerzeitung.ch)