Suez shipping traffic drops 20% as Houthi attacks continue

Reuters/Khaled Abdullah

• Rerouting costs $1m each journey
• Container fees rise 44%
• UK threatens military response

Shipping traffic through the Suez Canal has dropped by as much as one-fifth in the last two weeks as Yemeni Houthis continue to target vessels in the Red Sea.

Statistics from the International Monetary Fund’s (IMF) PortWatch platform revealed a 20 percent drop in ships using the Suez Canal route between December 24 and January 2, compared to the same period one year ago.

Some of the biggest operators in the industry, including CMA CGM of France, MSC of Switzerland and A.P. Moller-Maersk of Denmark, halted journeys through the Suez Canal and Red Sea after a number of missile and drone attacks from the Yemen-based militants.

• Denmark’s Maersk gears up to restart Red Sea operations
• Jet fuel most exposed to Red Sea closure, analysts say
• Shipping insurance rates rise on Red Sea crisis

Instead they chose to reroute vessels around the Cape of Good Hope and the tip of Africa, adding an extra 3,000 nautical miles and 10 days to the journey as well as up to $1 million more to fuel each trip between Asia and Northern Europe.

Maersk had momentarily resumed voyages through the route, which is used by an estimated one-third of global container ship cargo, but later terminated again following a fresh spate of attacks.

The cost to ship a container from China to the Mediterranean increased 44 percent in December, hitting $2,413, as a result of the issues in the Red Sea, according to Freightos, a digital booking and payment platform for the international freight industry.

Maersk introduced a transit disruption surcharge (TDS) to cover extra costs associated with the longer journey, and a peak season surcharge (PSS) from the start of this year. 

It means a standard 20-foot container travelling from China to Northern Europe will see an increased charge of $700, which is made up of a $200 TDS and $500 PSS.

Despite international pressure to stop the attacks, a Houthi drone boat packed with explosives exploded in the Red Sea on Thursday, although no damage was caused and no casualties were reported.

The US, Britain and Japan previously issued a joint statement warning the Houthis of unspecified “consequences” unless it halts its attacks.

Speaking this week, UK Foreign Secretary David Cameron said: “The world economy, every economy, will suffer if ships keep coming under attack in this illegal and unacceptable way. And these attacks need to stop or actions will be taken.”

The US and other countries last month announced the launch of Operation Prosperity Guardian to protect civilian vessels in the Red Sea.

The group has shot down two cruise missiles, six anti-ship ballistic missiles and 11 drones, according to reports.

The Iran-aligned Houthis, who control much of Yemen, have launched multiple explosive drones and missiles at commercial vessels since November 19, in what they say is a protest against Israel’s military operations in Gaza.