Houthi attacks hit vessel tonnages through Red Sea

LONDON / ANKARA

Houthi attacks caused a significant decline in vessel tonnages and grain flows especially for wheat through the Red Sea as shipping companies are forced to avoid the Suez Canal and reroute around the Cape of Good Hope, at the southern tip of Africa.

This diverting route “is a significant disruption since the Suez Canal handles about 12% of global trade and around one-third of container shipping between Asia and Europe," World Trade Organization (WTO) Chief Economist Ralph Ossa told Anadolu.

Since last November, Houthis in Yemen have targeted merchant vessels in the Red Sea in retaliation for Israel's attacks on Gaza. Last week, the US and UK began joint strikes on military targets associated with Houthis.

Due to ships taking longer routes, freight rates rose and deliveries are delayed for more than a week.

"This comes at a time when tight monetary policy, limited fiscal space, and rising geopolitical tensions are already creating headwinds for global trade," Ossa added.

According to data compiled by Anadolu from maritime services provider Clarksons Research, the total tonnage of vessels arriving in the Gulf of Aden plunged 65% on Jan. 12-16, compared to the first half of December 2023, and the container volumes in 20-foot equivalent unit (TEU) dipped 90%.

While the flow of tonnage continues in bulk carriers, transits fell 20%.

Tanker disruption became more evident, with tonnage entering the Gulf of Aden dropping 45% on 2023 levels.

According to the UK-based maritime research and consulting services provider Drewry, the World Container Index soared 82% year-on-year to $3,777 per 40-foot container as of Jan. 18.

This marked the highest level since October 2022 and 166% more than average 2019 (pre-pandemic) rates of $1,420.

Freight rates on Shanghai to Rotterdam jumped 174% from a year ago to $4,951 per 40-ft container as of Thursday. Rates on Shanghai to Genoa leaped 126% to $6,282 per 40-foot equivalent unit (FEU) in the same period.

Grain trade flow in Red Sea slows

According to data from the WTO, total grain and oilseeds volumes transiting via the Suez Canal fell from 7.2 million tons in November 2023 to 5.9 million tons in December, with companies increasingly diverting to alternative routes.

This was nearly one-fifth lower on an annual basis and 15% below the three-year average, it noted.

In the first half of January, grain and oilseeds volumes through the Red Sea slipped 0.9 million tons, down threefold year-on-year and 63% compared to the three-year average for that period.

While the initial impact of the attacks in the region was muted on wheat, flows plunged 40% from last year in the first half of January, estimated at 0.5 million tons.

Global trade slows 1.3% in December

According to the German economic institute IfW Kiel, global trade slowed by 1.3% from the prior month to December 2023

The number of containers shipped in the Red Sea fell by more than half in December to 200,000 containers per day, from 500,000 containers in November.