Significantly fewer cargo ships are sailing through the Suez Canal due to tensions arising from the Gaza conflict. There were 42 percent fewer ships sailing on the connection between the Red Sea and the Mediterranean this January than at the peak in the first half of last year, the UN Conference on Trade and Development (Unctad) reported on Thursday in Geneva. Container spot prices from Shanghai in China to Europe rose by an average of 256 percent from the beginning of December to the end of January.
In the Red Sea, the militant Islamist Houthis from Yemen have recently repeatedly attacked ships on the important sea route through the Suez Canal. The militia wants to force an end to the Israeli attacks in the Gaza Strip by shelling merchant ships, which followed the unprecedented massacre by the Islamist Hamas in Israel on October 7th.
Impairments caused by conflicts and low water levels
Global freight transport is also affected due to the Russian war of aggression against Ukraine in the Black Sea and low water levels in the Panama Canal. Unctad warned of “potentially far-reaching economic impacts from prolonged disruptions in container traffic, threatening global supply chains and leading to delivery delays, higher costs and inflation. Consumers will feel the full impact of higher freight rates within a year.”
Marine transport accounts for 80 percent of global freight movements, according to Unctad. Freight operators sometimes have to take long detours to avoid the canals. Costs increased due to longer transport and higher insurance costs. In addition, the environmental impact increased due to the longer routes and because captains drive faster in order to be able to stick to delivery schedules as much as possible. On the route from Singapore in Southeast Asia to Rotterdam in the Netherlands, higher fuel consumption and faster driving could increase greenhouse gas emissions on a return trip by 70 percent, according to Unctad estimates.
“Increasing uncertainty and the bypassing of the Suez Canal via the Cape of Good Hope entail both economic and environmental costs, putting additional pressure on developing countries,” Unctad reported. (dpa)