DUBAI, UNITED ARAB EMIRATES — Container shipping through the Red Sea has dropped by nearly one-third this year as attacks by Yemen’s Houthi rebels continue, the International Monetary Fund said Wednesday.
Shippers are scrambling to find alternative ways to transport goods from China to Europe in light of the disruption caused by attacks on the Red Sea, a major ocean route.
Jihad Azour, director of the IMF Middle East and Central Asia Department, said at a press conference on Wednesday that reduced shipping volumes and related increases in shipping costs have caused additional delays for goods from China, and if the problem escalates, it may deepen the impact on the economies of the Middle East and Central Asia.
Container freight rates have risen sharply as shipping companies deal with disruptions to shipping in the Red Sea. B. Riley Securities analyst Liam Burke said in an interview with MarketWatch that from the third quarter of 2021 to the third quarter of 2023, container freight rates continued to decline, but the Freightos Baltic Index showed that from December 31, 2023 to January 2024 On the 29th, shipping costs increased by 150%.
Julija Sciglaite, head of business development at RailGate Europe, said rail freight can arrive in 14 to 25 days, depending on origin and destination, which is far superior to sea freight. It takes about 27 days to travel by sea from China via the Red Sea to the Port of Rotterdam in the Netherlands, and another 10-12 days to go around the Cape of Good Hope in South Africa.
Sciglaite added that part of the railway runs on Russian territory. Since the outbreak of the Russo-Ukrainian war, many companies have not dared to ship goods through Russia. “The number of bookings has dropped significantly, but last year, this route was recovering due to good transportation time and freight rates.”
Post time: Feb-04-2024