Red Sea Disruption May Cause Fresh Rate Hikes

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Container and commodity shipping rates will likely rally in the coming months if disruptions continue because of Houthi attacks in the Red Sea, Greek shipowner Evangelos Marinakis said.

Tighter Market 

The tensions haven’t shown up in earnings yet. Still, the prolonged impact of sailing thousands of extra miles around the tip of Africa likely will bite in the second half, Marinakis said at the TradeWinds Shipowners Forum in Athens.

“This is building up and building up and, in my opinion, in two or three months, as long as this continues, we will see a tighter market,” Marinakis said. “Very soon, the available vessels will not be able to fulfill demand.”

Bracing For Disruption

For months, ships have been avoiding the Red Sea because militants in Yemen were firing missiles at merchant vessels — a response to Israel’s actions in Gaza. That supercharged earnings as sailing distances increased.

Shipowners have said in recent weeks they’re bracing for the disruptions to last through the rest of 2024, at least.

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Source: Bloomberg

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