Impact of Houthi Attacks on Red Sea Shipping Routes

Houthi militant attacks on vessels in the Red Sea have seriously disrupted a crucial shipping route for east-west trade. This has led to increased freight rates, congestion in ports, and forced shipping companies to reroute their vessels, causing widespread disruption expected to last for months.

Houthi militant attacks on vessels in the Red Sea have disrupted a critical shipping route essential for east-west trade. The prolonged rerouting of shipments has resulted in higher freight rates and notable congestion at both Asian and European ports.

Several shipping companies have taken action in response. For instance, the French group CMA CGM has suspended most Red Sea voyages while still sending some cargoes with French navy escorts. DIANA SHIPPING has completely avoided the Suez Canal. Significant players like DSV, EVERGREEN, and FRONTLINE have rerouted their vessels around Africa to ensure safety and minimize risks.

Other companies, such as HAPAG-LLOYD, HMM, and MAERSK, have also made substantial adjustments, forecasting difficult months ahead as disruptions continue. The broader impact on global trade remains considerable as multiple firms anticipate ongoing challenges in the third quarter of the year.

(With inputs from agencies.)