Maritime shipping prices rise after new attacks on ships in the ‎Red Sea

Sea freight prices rose after a missile attack and attempted detention on a Maersk ship at the weekend, prompting shipping companies to suspend plans to resume crossings of the Red Sea, a main artery that leads to the Suez Canal.

According to Reuters, the attacks forced ships to change their course to circle the southern tip of Africa, which led to higher costs for this longer journey, but prices are still much lower than the levels they reached in 2021 during the Covid-19 pandemic.

The Egyptian Suez Canal connects the Red Sea to the Mediterranean, and is the fastest way to ship fuel, food, and consumer goods from Asia and the Middle East to Europe. Shipping companies use this route to transport up to a third of total global container shipments, which transport goods such as toys, tennis shoes, furniture, and frozen food.

The attacks have already led to delays in the delivery of products destined for many companies, as companies such as Walmart, IKEA, and Amazon use the Suez Canal route.

According to the reservation and payment platform for international shipping (Fretos), shipping prices from Asia to Northern Europe more than doubled, exceeding $4,000 per 12-meter container this week, and prices from Asia to the Mediterranean increased to $5,175.

Judah Levin, head of research at Fritos F, said that some shipping companies announced prices of more than $6,000 per 12-meter container for Mediterranean shipments starting in the middle of the month, and additional fees ranging from $500 to $2,700 per container could increase Makes the all-inclusive prices even higher

As of Wednesday, hundreds of container ships and other vessels had been rerouted to take the Cape of Good Hope route in South Africa to avoid attacks, adding between a week and 20 days to their journeys.

Logistics executives said the so-called one-time “spot” rates are roughly twice the freight rates that move in the contract market.

Up to 30% of the goods arriving on the East Coast of the United States pass through the Suez Canal.

Logistics executives expect some of these imports to be diverted to the US West Coast, a direct destination across the Pacific from China and other Asian exporters.

Prices for shipments from Asia to the east coast of North America rose by 55%, reaching $3,900 per 12-meter container. Levin said that prices for the West Coast jumped 63 percent, exceeding $2,700, before the expected diversion of goods to avoid problems related to the Red Sea.

Despite the rise in prices, they are still far below the record levels resulting from the pandemic in 2021, which amounted to $14,000 per 12-meter container heading from Asia to northern Europe and the Mediterranean, and $22,000 from Asia to the East Coast of North America.