During the first seven weeks of 2024, cargo volumes to and from ports in the Gulf of Aden and Red Sea declined 21% y/y. The number of ships arriving in these ports significantly declined as merchant shipping increasingly avoided transiting through the region due to concerns over attacks on ships by the Houthis.
Since November 2023, Houthi forces have attacked ships in the Red Sea and Gulf of Aden.
Ship transiting lower
So far in February, the number of ships transiting through the Gulf of Aden and the Suez Canal is 50% and 37% lower than last year respectively. Container ship transits are down by 70% through the Gulf of Aden and the Suez Canal. Prior to the attacks, shipments through the Suez Canal accounted for roughly 10% of global trade.
Ability of countries affected
The attacks on ships in the Red Sea are directly affecting the ability of countries in the region to import and export cargo. Even where alternative export routes exist, these often come at a higher cost, longer duration and with constraints to capacity.
Economy can affect
The worsening conditions could affect the economies and possibly add to instability in several economies in the region. Yemen, Sudan and Somalia already suffer under armed conflicts.
A US-led coalition and a recently launched maritime operation by the EU have been deployed with the aim to safeguard ships in the Red Sea.
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Source : Bimco
