Maritime shipping costs have surged following a rocket attack and an attempted hijacking that a Maersk vessel experienced at the start of the week. This has led shipping companies to suspend plans to resume transit through the Red Sea, which is a primary artery leading to the Suez Canal.
Since last November, the Yemeni Houthi group has launched attacks using drones and missiles on high-value shipping vessels traversing the Red Sea towards Israel, asserting their determination to pressure Israel due to its aggression on Gaza.
The attacks have forced ships to divert their courses to go around the southern tip of Africa, leading to an increase in costs for this longer journey, although prices are still significantly lower than the levels reached in 2021 during the COVID-19 pandemic.
The Egyptian Suez Canal links the Red Sea with the Mediterranean Sea and is the quickest way to ship fuel, foodstuff, and consumer goods from Asia and the Middle East to Europe. Shipping companies use this route to transport about one-third of the global container shipping, carrying goods like toys, shoes, furniture, and frozen food.
The attacks have already caused delivery delays for products headed to numerous companies, with businesses such as Walmart, IKEA, and Amazon utilizing the Suez Canal route.
Price Details
According to the international shipping booking and payment platform Freightos, shipping prices from Asia to Northern Europe have more than doubled, exceeding $4,000 per 12-meter container this week. Prices from Asia to the Mediterranean increased to $5,175.
Yehuda Levin, head of research at Freightos, stated that some shipping companies announced prices over $6,000 per 12-meter container for Mediterranean shipments starting in mid-month. Moreover, additional fees ranging from $500 to $2,700 per container could make comprehensive prices even higher.
Until this Wednesday, hundreds of container ships and other vessels had to change their routes to take the Cape of Good Hope in South Africa to avoid the attacks, adding between one to twenty days to their trips.
Logistics service executives mention that the so-called 'spot rates' paid on a one-off basis are nearly double the shipping prices that fluctuate in the contracts market.
Christian Roar, Executive Vice President of Ocean Shipping at Unique Logistics, expressed, "Those desperately seeking space onboard will pay."
Shipping prices to North American ports, less impacted by the situation, are also rising.
Around 30% of goods arriving at the east coast of the United States transit through the Suez Canal.
Below Record Levels
Logistics executives anticipate some imports to be redirected to the West Coast of the United States, a direct destination across the Pacific Ocean from China and other Asian exporters.
Shipping prices from Asia to the North American East Coast have risen by 55%, reaching $3,900 per 12-meter container.
Levin noted that prices for the West Coast jumped by 63%, surpassing $2,700 before the expected rerouting of goods to avoid Red Sea-related issues.
Despite the hike in prices, they are still considerably lower than the record levels caused by the pandemic in 2021, which hit $14,000 per 12-meter container from Asia to Northern Europe and the Mediterranean, and $22,000 from Asia to the North American East Coast.
