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According to the U.S. Defense Intelligence Agency, container traffic through the Red Sea fell by about 90% from December 2023 to mid-February 2024 as the Houthis attacked ships on major trade routes.
“Alternative routes around Africa have increased Each voyage is approximately 11,000 nautical miles, 1-2 weeks of transit time and approximately $1 million in fuel costs,” the agency said in its first formal assessment of the impact of the attacks.
“For many shipping lines, the combined cost of crew bonuses, war risk insurance (up to 1,000% higher than pre-war costs) and Suez Canal transit fees made the additional time and financial costs of sailing around Africa cheaper by comparison.”
As of mid-February, insurance premiums for ships sailing in the Red Sea rose to 0.7-1.0% of the total value of the ship, compared with less than 0.1% before December 2023.
“The threat to Red Sea transit caused by drought disruption in the Panama Canal adds to ongoing pressure on global shipping,” the Defense Intelligence Agency noted.
Long shipping routes around Africa have also delayed humanitarian aid in Sudan and Yemen for weeks, causing further losses for aid groups.
The Houthis began attacking ships in the Red Sea at the end of last year in retaliation for Israel’s war in Gaza, affecting the interests of at least 65 countries. Some 29 major energy and shipping companies – including BP (BP), Shell (SHEL) and Euronav (EURN) – were forced to change routes.
