Houthi Attacks Continue to Disrupt Ocean Freight & Cause Pricing Fluctuations

Houthi Attacks Continue to Disrupt Ocean Freight & Cause Pricing Fluctuations

We have been closely monitoring the Red Sea Crisis since October, when the Houthi attacks began, and have been providing updates as often as possible. Two weeks ago, the first fatal attack by the Houthi Rebels claimed the lives of three people, resulting in a loss of optimism for these attacks to end in the near future. 

Due to the continuation of these attacks and the risk to crew and cargo, ocean freight carriers are still re-routing their ships through the Cape of Good Hope. Over a few weeks’ time, this had caused a 200% surge in rates for container spots, due to the uncertainty of the duration of the attacks. 

A lot of smaller businesses took a hit from the initial spike in shipping rates, and businesses overall are at a disadvantage from the longer shipping times. Regulators are continuing to watch the situation to protect shipping companies from losing money, while also protecting their customers from price gouging while the disruptions continue. 

After weeks of skyrocketing shipping costs, we are thankfully seeing a loss of momentum in shipping prices. Due to the Lunar New Year, and the slowing of manufacturing, it seems that companies have been able to balance out the shipping capacity. Over the last few weeks, the following routes have seen drops in pricing; 

• The Drewry World Container Index – Global Composite fell by 4.54%
• The Freightos Baltic Daily Index – Global fell by 8.2% 
• The Freightos Baltic Daily Index from China to the Mediterranean fell by 12.4%
• The Freightos Baltic Daily Index from China to Northern Europe fell by 4.4% 
• The Freightos Baltic Daily Index from China to the North American West Coast fell by 7.8%
• The Freightos Baltic Daily Index from China to the North American east coast fell by 9.7%
• The Drewry World Container Index from Shanghai to Los Angeles fell by 4.8%
• The Drewry World Container Index from Shanghai to New York fell by 6.2%

Companies are hoping for a continued smooth return from the Lunar New Year, so that shipping might see some normalcy as production picks back up. 

Western Overseas is committed to providing updates as the Red Sea Crisis continues, and we will continue to keep an eye on transit news to make sure our customers have the most up to date information. Follow us on X, Facebook, or LinkedIn for additional updates.