Cargo volumes in Red Sea area drop 21% due to attacks on ships

The number of ships transiting through the Gulf of Aden and the Suez Canal so far in February is 50 percent and 37 percent lower than last year, respectively. "Container ship transits are down by 70 percent through the Gulf of Aden and the Suez Canal. Prior to the attacks, shipments through the Suez Canal accounted for roughly 10 percent of global trade," says the latest update from BIMCO.

Since November 2023, Houthi forces have attacked ships in the Red Sea and Gulf of Aden, and most container and gas carriers started avoiding the region in December. A significant reduction in transits was seen across most sectors by January, the update added. “During the first seven weeks of 2024, cargo volumes to and from ports in the Gulf of Aden and Red Sea declined 21% y/y," says Niels Rasmussen, Chief Shipping Analyst, BIMCO.

"The number of ships arriving in these ports significantly declined as merchant shipping increasingly avoided transiting through the region due to concerns over attacks on ships by the Houthis. "The attacks on ships in the Red Sea are directly affecting the ability of countries in the region to import and export cargo. Even where alternative export routes exist, these often come at a higher cost, longer duration and with constraints to capacity." Saudi Arabia, Jordan and Egypt can avoid the Red Sea as Saudi Arabia and Jordan can transport cargo via, for example, Dammam in the Persian Gulf while Egypt can rely on its Mediterranean ports such as Alexandria and Damietta, the update added. "However, rerouting will be difficult for all but container cargoes." Other countries do not appear to have viable alternatives to Red Sea shipping and any attempts to transport cargo overland would likely be very difficult. "Consequently, shipments in Sudan, Somalia, Eritrea and Yemen have so far fallen 25 percent y/y in 2024. Djibouti is a noteworthy exception where shipments have remained stable."

Rasmussen says: “A U.S.-led coalition and a recently launched maritime operation by the EU have been deployed with the aim to safeguard ships in the Red Sea. However, the attacks have not yet ceased, and the outlook remains uncertain. Until a solution emerges, regional economies will continue to bear the cost." BIMCO Red Sea Houthis Niels Rasmussen