299 Container Ships Divert from Red Sea

According to industry data compiled by Flexport Inc., half of the container ships that regularly pass through the Red Sea and Suez Canal are now avoiding the route due to the risk of attacks. This represents about 18% of global shipping capacity, with 299 ships carrying a total of 4.3 million containers changing course or planning to do so. Rerouted journeys around Africa can take up to 25% longer than using the Suez Canal, leading to higher prices for consumers on a variety of products.

The attacks in the Red Sea are being carried out by Yemen-based Houthis, leading to an escalation of the war that threatens world trade. Some ships are attempting to demonstrate their neutrality while continuing to use the route, but the increased disruption is evident in the increasing number of ships being rerouted through Africa.

The diversions are straining shipping capacity and increasing freight rates, with the worst-case scenario being a 20% drop in global shipping capacity. The U.S.-led task force is working to increase security in the area, but the situation is driving up shipping insurance costs and creating uncertainty for companies with cargo on rerouted ships.

Source .