GENEVA: Attacks on commercial vessels in the Red Sea caused 42 per cent fewer ships to travel through the Suez Canal this January than at the peak in the first half of last year, a UN trade body said on Thursday, warning that the full impact has yet to be felt by consumers, reported dpa news.
The disruption on the route that connects the Red Sea and the Mediterranean has caused spot container prices from Shanghai to Europe to rise by an average of 256 per cent between the beginning of December and the end of January, the UN Conference on Trade and Development (UNCTAD) said, citing just one example.
Houthi militants from Yemen have been attacking ships in the Red Sea in what they say is retaliation for Israeli military action in the Gaza Strip.
Globally, freight transport has also been affected by the Russian war against Ukraine in the Black Sea and low water levels in the Panama Canal, which connects the Atlantic Ocean with the Pacific Ocean.
UNCTAD warned of the “potential far-reaching economic implications of prolonged disruptions in container shipping, threatening global supply chains and potentially delaying deliveries, causing higher costs and inflation. The full impact of higher freight rates will be felt by consumers within a year.”
Ocean transport accounts for 80 per cent of global freight movements, according to UNCTAD. Freight carriers sometimes have to take long detours to avoid the two Suez and Panama canals, which leads to rising costs due to longer transport times on top of higher insurance premiums.-Bernama
