Shipping stocks in Asia experienced a significant surge amid rising expectations of disruptions to Red Sea routes, driven by militant attacks, leading to potential increases in freight rates.
Escalating Threats and Route Changes
Major shipping companies, including MSC and A.P. Moller-Maersk, announced their avoidance of the Suez Canal due to intensified attacks by Houthi militants in Yemen. The threats have prompted the re-routing of vessels, potentially causing a 6% effective supply reduction in the global container industry. As a result, shipping stocks in Asia, particularly in Japan and China, saw substantial gains, with some companies rising as much as 10%. The shift in routes is expected to increase travel time by 10 to 14 days, impacting freight rates and positively influencing shipping stocks in the region.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: THE STRAITS TIMES
