Houthi attacks on ships in the Red Sea, and now a resurgence in piracy off the coast of Somalia, have affected some 13% of global seaborne trade, according to BIMCO shipping analyst Filipe Gouveia, noting that the attacks had reduced the number of ships transiting the area by 50%
During the first three weeks of March, the number of ships transiting through the Suez Canal was down 51% year-on-year, with larger ships being more likely to divert. As a result, there was a 63% year-on-year decline in gross tonnage.
“Despite efforts to improve safety, both groups remain active, and the Houthis have threatened to expand their attacks to ships in the Indian Ocean. Unless safety in the area improves significantly, ships cannot return to their normal routes. As shipping is responsible for transporting around 80% of world trade, delays and higher costs are expected to continue,” Gouveia said.
Meanwhile, the shipping industry is consuming an additional 100,000 bpd because ships are sailing around the Cape of Good Hope, according to Vitol CEO Russell Hardy.
He said last Wednesday March 20th that the total distance travelled by ships was about 3% more than it was before the Houthi attacks on shipping began in November last year.
“We have had to re-orientate so much all over,” he said at a panel during the CERAWeek conference in Houston, Texas. “There is a lot more unusual movement happening today than was happening in 2019.”