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13 Jan, 2024 11:25

Suez Canal tolls rise by 300% – Sky News

Houthi attacks from Yemen on commercial vessels in the Red Sea and Gulf have generated major disruption across key shipping artery
Suez Canal tolls rise by 300% – Sky News

The cost of transporting cargo through the Red Sea and the Suez Canal, a major waterway for global shipping, have surged over 300% since November, amid Houthi attacks on commercial vessels thought to be Israel-linked, Sky News reported on Friday, citing data analyzed by global logistics company DSV.

The Shanghai Containerized Freight Index (SCFI), the most commonly used measure of such costs, reached $3,101 per 20-foot container from $2,871 last Friday. The data shows that the overall price of a container being shipped from Shanghai to Europe was reportedly 310% up from prices at the beginning of November.

The Houthis, who have pledged to support Gaza amid fighting in the enclave between Israel and the Palestinian militant group Hamas, have since mid-October launched multiple drones and missiles targeting commercial vessels in the Red Sea, as well as warships patrolling the vital channel. They have carried out more than two dozen attacks, forcing major freight giants like MSC, Maersk, CMA CGM and Hapag-Lloyd, to divert cargo around the southern tip of Africa, avoiding the Gulf of Aden and the Suez Canal.

This rerouting adds more than ten extra days to the journey and sends insurance bills surging. At the same time, the cost of staff wages has increased, while longer journeys also force the transportation companies to burn additional fuel.

Despite the major increases, shipping costs remain below levels recorded in March 2021 when the grounded 400-meter-long Ever Given container ship blocked the Suez Canal, leaving the crucial trade route impassable for six days. That incident left hundreds of ships stuck in mooring and reportedly held up $9 billion of global trade for each day of stoppage.

Earlier this week, the US and UK began carrying out airstrikes on Houthi militias in Yemen in response to the group’s actions in the Red Sea and the Gulf. The move has garnered mixed international reactions, with many warning that it would lead to escalation of conflict in the Middle East.

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