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Red Sea shipping attacks tail off but airfreight costs on the rise

[ April 17, 2024   //   ]

Houthi rebels are continuing to affect shipping in the Red Sea but attacks are beginning to slow, says visibility firm Project44. Over 400 airstrikes on targets in Yemen by the US and Britain have killed 37, and it is likely that the persistent counterattacks have caused the Houthi weapon supply to dwindle.

The US has meanwhile announced that it would consider removing the “terrorist group” classification on the Houthis if they end their attacks in the Red Sea.

On 13 April, Iran seized the container vessel MSC Aries claiming that it was in violation of maritime laws.

Shortly afterwards, Iran launched a large-scale drone strike on Israel, although most were intercepted.

Project44 says that carriers have not taken further measures to reroute ships but is continuing to closely monitor the situation.

Since the attacks began in December, 649 vessels have avoided the Red Sea, leading to the lowest volume through the Suez Canal in recent history, including March 2021, when it was blocked by the Ever Given for six days.

March 2024 has seen an 8.5% increase in vessel traffic compared to February, but this is not a sufficient to prove that confidence over the Red Sea passage is rising, says Project44. 

Meanwhile, freight forwarder Woodland said that the unrest in the Middle East has had an impact on air freight. 

While the Red Sea crisis has already led to a shift of large amounts of cargo traffic to air, the latest attacks are expected to see air freight costs to Europe rise by 10-15%, as well as increase in insurance costs. Some airlines have cancelled flights from the Far East to Middle East destinations, including Iran, Jordan, Iraq, Lebanon and Israel. Airlines have also had to re-route other flights, causing payload issues and longer transit times. Some have stopped accepting new cargo until further notice and space in the market is expected to become even tighter in the coming days. A possible increase in fuel prices could lead to a further rise in rates.

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