Decline in Container Shipping Through Red Sea and Suez Canal: Container shipping through the Red Sea and Suez Canal has decreased once again due to the ongoing conflict in the Middle East, as reported by a German economic think tank on March 11. The number of containerships using the route has reduced to around 40 per day, down from over 100 a year ago, according to the Kiel Institute for the World Economy.

Impact on North Sea Ports: The conflict initially caused disruption, leading to a decline in shipping frequencies in North Sea ports like Hamburg, Bremerhaven, Rotterdam, and Antwerp. While arrivals had dropped by approximately 25% in December and January, the decline has now lessened to around 15% overall. Notably, Bremerhaven saw a 2% increase in arrivals.

Rate Fluctuations and Mitigation Efforts: Spot rates for standard containers shipped from China to northern Europe have decreased to $4,500 from a high of $6,000 in January. Shipping companies are employing more ships to offset delays, with the number at sea rising by 0.3% in February compared to January, totaling about 5,450 ships.

Causes of Conflict and Impact on Shipping: Yemen’s Iran-backed Houthi rebels initiated attacks on commercial vessels in the Red Sea in response to an Israeli military campaign in the Gaza Strip. These attacks have disrupted shipping routes and led to increased tensions in the region.

Longer Routes and Added Delays: Rerouting ships around Africa due to the conflict adds approximately two weeks to the voyage, contributing to delays and logistical challenges for shipping companies navigating the affected routes.