Crisis in the Red Sea Intensifies Challenges for Freight Rates and Equipment Accessibility

Since late 2023, major carriers suspended Suez Canal voyages due to Houthi rebel attacks in the Red Sea. Longer Asia-Europe transit times via the Cape of Good Hope caused operational disruptions, escalating international sea freight costs through surcharges and steep rate hikes. Drewry’s World Container Index hit $4,984/40ft for Asia-North Europe and $6,365/40ft for Asia-Mediterranean, reflecting 186% and 129% year-over-year rate surges.

Other trade lanes experienced rate increases, prompting carriers to push customers toward the spot market for profitability. ShippingWatch anticipates continued rate rises in February, likely subsiding post-Chinese New Year. Rerouted ships lead to European port congestion, Asia-Europe capacity crunch, and a Europe-to-Asia equipment shortage.

Mediterranean ports, notably Port of Piraeus, face operational challenges with ships rerouted via the Atlantic. Some carriers, like Maersk, redirect through Algeciras and Tangiers, compensating for capacity loss but causing operational issues and reduced direct connections in the Mediterranean. CLECAT urges caution in imposing surcharges and freight hikes, emphasizing their necessity only for extra costs on affected sea routes amid the exceptional situation.