News
Houthi attacks on ships in the Red Sea, coupled with a rise in piracy off the coast of Somalia, are disrupting global trade. In 2023, an estimated 13% of global seaborne trade transited through the areas, according to the Baltic and International Maritime Council (BIMCO), which adds that Houthi and piracy attacks have reduced the number of ships transiting the areas by 50%.
Since November 2023, threats to shipping have increased as the Houthis have started attacking ships in the Red Sea and the Gulf of Aden. Simultaneously, piracy activities off the east coast of Somalia have risen and since December, two bulk carriers and several fishing ships have been hijacked. It marks the first successful hijackings by Somali pirates in six years.
As a result, there has been a significant reduction in ships in the region since January 2024. In the first three weeks of March, the number of ships transiting through the Suez Canal was down 51% year on year, accounting for a 63% drop in gross tonnage.
Ships increasingly avoid the affected areas and sail longer distances around the Cape of Good Hope, delaying cargo, tightening supply and increasing freight rates. The longer distances also boost bunker oil consumption which raises voyage costs and carbon emissions.
