22% drop in shipping traffic through the Red Sea

Maritime traffic through the Red Sea has dropped 22 per cent in a month as a result of the threat posed by Yemen’s Houthis, European Commission Vice President Valdis Dombrovskis said yesterday.

However, the decline will accelerate as shipping companies are re-routing vessels around the Africa continent, he said, adding that the Commission was monitoring the situation very closely.

“So far there has not been visible impact on energy prices and more generally impact on goods prices. But we already see impact on transport prices, which have increased,” Dombrovskis told reporters after a meeting of EU trade ministers that addressed the issue. “Certainly, it’s a risk factor.”

“The broader economic impact on consumer prices and the EU economy in general will depend very much on the length of this crisis,” he said. “Hence, swift action is necessary.”

Danish shipping company Maersk announced at the end of 2023 the imposition of additional fees on container shipments between Asia and Europe after changing the course of its ships from the Suez Canal via the Cape of Good Hope, South Africa. Leading markets to believe a knock on effect on the cost of consumer products will follow.

Yemen’s Houthi group, officially known as Ansar Allah, has said it will only stop targeting Israel-bound ships when the occupation state stops its genocidal bombing of Gaza.

READ: Yemen Houthis claim to attack US army cargo ship in Gulf of Aden