In a concerning development, the United Nations Conference on Trade and Development (UNCTAD) has reported a substantial 45 percent decline in freight passing through the Suez Canal over the past two months.
This sharp decrease follows Houthi rebel attacks on vessels in the Red Sea, forcing shipping companies to reroute shipments and causing significant disruptions to global supply chains.
UNCTAD's Chief of Trade Logistics, Jan Hoffmann, expressed deep concern over the repercussions of these disruptions, highlighting that shipping costs have surged, and both energy and food costs are being affected. The Suez Canal, a crucial maritime trade route connecting the Mediterranean Sea to the Red Sea, serves as a vital sea lane for energy and cargo transportation between Asia and Europe. Major players in the shipping industry have temporarily ceased using the Suez Canal, exacerbating the strain on already overburdened maritime trading routes.
The attacks in the Red Sea by Yemen-based Houthi rebels have resulted in dozens of drone and missile attacks since the start of the Israel-Hamas war in October. UNCTAD revealed that since the beginning of December, 39 percent fewer ships have traversed the canal, leading to a significant 45 percent drop in freight tonnage.
This decline underscores the profound impact on global trade and the vulnerability of maritime transport to geopolitical tensions and climate changes.
Hoffmann emphasized that the disruptions extend beyond the Red Sea attacks, pointing to challenges stemming from the conflict in Ukraine and low water levels in the Panama Canal.
These multifaceted issues are converging to create a complex landscape for global trade routes.
"Maritime transport is really the lifeline of global trade," Hoffmann emphasized, underscoring the urgency for addressing these disruptions and fortifying the resilience of international trade in the face of evolving geopolitical and environmental challenges.
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