Gulf of Aden And Red Sea Reports 21% Decline In Cargo Volumes

The number of vessels that transit via the Gulf of Aden and the Suez Canal until February is 50% and 37% lower than last year, respectively. Container vessel transits have decreased by 70% via the Gulf of Aden and the Suez Canal. Before the attacks, the shipments via the Suez Canal accounted for almost 10% of worldwide trade, mentions the latest update via BIMCO.

Since November last year, Houthi forces have been attacking vessels in the waters of the Red Sea and the Gulf of Aden, and most gas carriers and containers began avoiding the area from December onward. The update elaborated that a massive reduction in transit was observed across most sectors by January 2024. During the first seven weeks of this year, cargo volumes from and to the ports in the Red Sea and Gulf of Aden dropped 21% y/y,” says Niels Rasmussen, Chief Shipping Analyst, BIMCO.

The number of vessels that arrived at these ports declined considerably as merchant shipping avoided transiting via the region due to worries regarding the attacks on the vessels by the Houthis. The attacks on vessels in the Red Sea are impacting the ability of nations in the region to import/export cargo directly.

Even when alternative export routes are prevalent, they typically are accessible at a higher cost, have a longer duration, and have constraints related to capacity. Saudi Arabia, Egypt, and Jordan can avoid the Red Sea as they can transport their respective cargo via, for instance, Dammam in the Persian Gulf. The update stated that Egypt could depend on the Mediterranean ports like Damietta and Alexandria.

However, the rerouting will be challenging for all but the container cargoes. Other nations don’t appear to have alternatives to the Red Sea shipping, and attempts to transport the cargo overland would be difficult. As a result, the shipments in Somalia, Sudan, Yemen, and Eritrea have dropped 25% y/y this year.

Djibouti is an exception, where the shipments have been stable so far. Rasmussen says that a U.S.-headed coalition and a new maritime operation introduced by the EU are being deployed to safeguard vessels in the waters of the Red Sea. However, these attacks haven’t yet ceased, and the outlook is still uncertain. Until a solution comes up, regional economies will bear the costs.

Reference: container-news

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