2 weeks ago

Red Sea crisis enters 1,000th day, shipping detours squeeze trade

Red Sea crisis enters 1,000th day, shipping detours squeeze trade
Red Sea crisis enters 1,000th day, shipping detours continue to squeeze trade · thehindubusinessline.com

The Red Sea and the Suez Canal form a very important water route that ships use to carry goods between Asia and Europe.

In November 2023, a rebel group called the Houthi rebels took over a cargo ship called the Galaxy Leader near Yemen.

Because it was no longer safe in that area, ships started taking a much longer route all the way around Africa instead.

That journey can now take about two weeks longer each way.

Longer trips mean ships use more fuel and cost more money.

This has pushed the cost of sending goods up, and some of those higher costs can reach shoppers as higher prices.

Companies in India that make clothes, leather goods, carpets and other products have been hurt because shipping is slower and more expensive.

Big shipping companies like Maersk and Hapag-Lloyd have started trying the Red Sea route again, but only a little and very carefully.

The crisis, now past 1,000 days, shows how much countries depend on safe shipping routes for trade.

Key facts

Crisis duration
1,000 days
Start date
November 19, 2023
Share of global maritime trade on the route
Nearly 15 percent
Added transit time per one-way Asia-Europe voyage
About two weeks
Freight rates vs pre-crisis levels
25-40 percent higher
Extra fuel and operational cost per voyage
$3-4 million
War-risk premium increase per voyage
Nearly $500,000
Worst-case freight rate spike (India-Europe/India-US routes)
200-400 percent

Sources

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