Red Sea Cargo Traffic Plummets by 21% Following Spate of Ship Attacks

BIMCO Reported Cargo volumes in the Gulf of Aden and Red Sea dropped 21% in early 2024, as ships avoided the area due to Houthi attacks.

The ongoing instability poses significant economic risks and could exacerbate the already precarious situations in nations like Yemen, Sudan, and Somalia, where armed conflicts and the need for international aid are pressing concerns. Efforts by a US-led coalition and a new EU maritime operation to secure the Red Sea have yet to quell the attacks, leaving the future of regional shipping and economic stability in uncertainty.

Since November 2023, the Red Sea and Gulf of Aden have seen an uptick in ship attacks by Houthi forces, leading to a significant shift in maritime traffic patterns. By December, the majority of container and gas carriers began circumventing the troubled waters, resulting in a marked decline in shipping transits. This February, the transit numbers through the Gulf of Aden and the Suez Canal have plummeted to 50% and 37% lower than the previous year, with container ship transits down by 70%.

The strategic Suez Canal, previously accommodating around 10% of global trade, is now underutilized, impacting the import and export capabilities of regional nations. Alternatives routes, while available to countries like Saudi Arabia, Jordan, and Egypt, come at increased costs and logistical challenges, particularly for non-containerized cargo. Countries without feasible shipping alternatives or overland transport options, such as Sudan, Somalia, Eritrea, and Yemen, have experienced a 25% drop in shipments in 2024. Djibouti remains an outlier, maintaining stable shipment levels despite the regional turmoil.

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The ongoing instability poses significant economic risks and could exacerbate the already precarious situations in nations like Yemen, Sudan, and Somalia, where armed conflicts and the need for international aid are pressing concerns. Efforts by a US-led coalition and a new EU maritime operation to secure the Red Sea have yet to quell the attacks, leaving the future of regional shipping and economic stability in uncertainty.