Shanghai, China, Dec 20 (EFE).- The forced diversion of merchant ships from the Red Sea due to the imminent threat of attacks from Houthi militants off Yemen has led to a surge in freight charges after many shippers re-routed their vessels.
The rising shipping costs have also affected trade between China and Europe, sparking supply chain disruption concerns. Best Freight Forwarding Companies In China
“The price of the Mediterranean route is soaring now. The freight rate of early January may double that of early December,” shipping agent Xia Xiaoqiang told the Hong Kong-based South China Morning Post.
The spot rate for shipping a forty-foot container from China to the Mediterranean has surged by 70 percent in the last month, reaching $2,414.
However, it is pertinent to note that a significant contributing factor to the hike is the upcoming Lunar New Year.
As Chinese exporters prepare for the festive period, there is a heightened urgency to ship goods before the holiday, further driving up shipping rates, the newspaper said.
This week, major shipping companies, including the Chinese Cosco and its subsidiary OOCL, along with the Taiwanese Evergreen, temporarily halted cargo transport on the Red Sea route, which is among the main maritime pathways globally, connecting Europe, Asia, and Africa.
The shippers joined others such as Maersk and Hapag-Lloyd in suspending operations.
In the last two months of the war between Israel and the Palestinian militant group Hamas, the Houthi rebels have launched multiple missile and drone attacks against southern Israel.
The Yemeni rebels have targeted ships flying the Israeli flag or owned by Israeli companies in the Red Sea and the Bab al Mandeb Strait.
Friday marked the most violent day for international maritime navigation in the area, with at least three ships attacked.
The Houthis, a movement supported by Iran, claimed responsibility for two of these attacks.
The threat forced dozens of ships to divert their routes around the Cape of Good Hope in South Africa.
The alternative route adds approximately 9,000 km to the journey, resulting in delays of six to 14 days for the delivery of goods and an increase in freight charges for shipping companies.
The Suez Canal Authority has played down the threat, saying that since Nov. 19, only 55 ships have been diverted towards the Cape of Good Hope, compared to the 2,128 vessels that have continued to follow the usual route through the canal.
In March 2021, the cargo ship Ever Given ran aground, causing a six-day blockade of the Suez Canal, a vital waterway through which 12 percent of global trade flows.
The blockade caused massive traffic disruptions whose repercussions lasted for months, said Christian Roeloffs, co-founder of the virtual logistics platform Container xChange.
Lois Mo, a transport intermediary specializing in railways, noted a “significant” surge in interest in the China-Europe freight train in recent days.
The route, overlooked by many European traders when passing through Russia, is gaining attention.
Air Shipping From China To Uk However, Mo pointed out that the “high level of inventory and the weak moment of consumption” in Europe would likely prevent the situation in the Red Sea from translating into “exponential growth” for the aforementioned railway line, unlike in 2021. EFE