[Freight Weekly] Red Sea Crisis and Impacts on Shipping

_{🛡️Red Sea and Gulf of Aden shipping drops significantly due to Houthis}

BIMCO reports that shipping through the Red Sea and the Gulf of Aden has seen a significant drop in cargo volumes — at least 21%. Raw tonnage numbers are down even more. What you need to know:

• Niels Rasmussen, BIMCO’s chief shipping analyst, reports that ships transiting through the Gulf of Aden and the Suez Canal dropped 50% and 37%, respectively, from last year for the month of February 2024.

• Container vessel transits have decreased by 70% through the Suez. >10% of all global trade transited through the Suez before the Houthi attacks.

• Maersk warns that ongoing supply chain disruptions due to the Red Sea crisis could drag into the second half of the year, further driving costs.

• Fitch Ratings says shipping costs have increased by more than 150% since December 2023, contributing to inflation increases and harming the Federal Reserve and other sovereigns hoping to tame inflation.

• Iranian-backed Houthi militants in Yemen, showing support for Hamas in their war with Israel, have consistently attacked commercial shipping.

• One of the most recent flashpoints drawing international criticism was the Feb. 18 attack on the MV Rubymar. The vessel is taking on water, has caused a miles-long oil slick, is abandoned, and is awaiting a tow.

• Al Jazeera reports over 40 vessels have been attacked since Nov. 2023.

Bottom line: International supply chain disruption linked to the Red Sea attacks has caused are taking a worsening toll on shipping, inflation, and violence.

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📰  WHAT ELSE IS GOING ON IN FREIGHT

🌱Hong Kong finance chief earmarks funds for green maritime trade: The South China Morning Post reports the municipal government of Hong Kong intends to invest heavily “to offer incentives to turn city into green maritime hub.”

💸Ritchie Bros. auctioning off Yellow Corp’s trucks and trailers: Auction giant Ritchie Bros. announced that it will start selling off Yellow’s trucks and trailers to further shed the bankrupt cargo company that got bailed out.

🤥Mexico will retaliate if the U.S. increases steel tariffs: Mexico’s economic ministry announced that it will boost steel tariffs on the United States. Calls for tariffs on steel imports are reportedly political in their intent and motivation.

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