NewsRescue
The cost of delivering cargo through the Red Sea and the Suez Canal, a vital waterway for global shipping, has increased by more than 300% since November, owing to Houthi attacks on commercial vessels suspected of being linked to Israel, Sky News reported on Friday, citing data analysed by global logistics giant DSV.
The Shanghai Containerised Freight Index (SCFI), the most generally cited metric of such charges, rose to $3,101 per 20-foot container from $2,871 last Friday. According to the data, the overall price of shipping a container from Shanghai to Europe has increased by 310% since the beginning of November.
Since mid-October, the Houthis, who have sworn to defend Gaza amid fighting between Israel and the Palestinian terrorist group Hamas, have launched a number of drones and missiles at commercial vessels in the Red Sea, as well as warships guarding the key passage. They have launched more than two dozen attacks, causing major freight companies such as MSC, Maersk, CMA CGM, and Hapag-Lloyd to move goods around Africa’s southern edge, avoiding the Gulf of Aden and the Suez Canal.
This rerouting adds more than ten days to the travel and raises insurance costs dramatically. At the same time, the cost of worker wages has risen, and longer travels require transport companies to use more fuel.
Despite the significant hikes, transportation costs remain lower than those recorded in March 2021, when the grounded 400-meter-long Ever Given container ship stopped the Suez Canal, rendering the critical commercial route unusable for six days. That catastrophe trapped hundreds of ships in moorings and reportedly slowed global trade by $9 billion per day.
Earlier this week, the US and UK launched airstrikes on Houthi forces in Yemen in reaction to the group’s operations in the Red Sea and Gulf. The move has elicited varied international reactions, with many fearing that it may lead to escalation of conflict in the Middle East.