In the initial seven weeks of 2024, cargo volumes moving to and from ports in the Gulf of Aden and the Red Sea experienced a notable 21% year-on-year decrease. This drop was primarily attributed to a substantial reduction in the number of ships navigating these waters, as concerns regarding ship attacks by the Houthis prompted merchant vessels to avoid transiting through the region.

Since November 2023, Houthi forces have been targeting ships in the Red Sea and the Gulf of Aden. By December, most container and gas carriers had started steering clear of the area, leading to a significant reduction in transits across various sectors by January.

In February alone, ship transits through the Gulf of Aden and the Suez Canal have plummeted by 50% and 37% respectively, compared to the previous year. Notably, container ship transits have seen a staggering 70% decrease in both the Gulf of Aden and the Suez Canal. Prior to the attacks, shipments passing through the Suez Canal accounted for approximately 10% of global trade.

These attacks are directly impacting the import and export capabilities of countries in the region. Even with alternative routes available, they often involve higher costs, longer durations, and capacity constraints. While Saudi Arabia, Jordan, and Egypt can potentially bypass the Red Sea, rerouting remains a challenging task for all but container cargoes.

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As of 2024, shipments in Sudan, Somalia, Eritrea, and Yemen have experienced a substantial 25% year-on-year decline. Djibouti stands out as an exception, with shipments remaining stable despite the adverse conditions.

The worsening situation poses a threat to the economies of several nations in the region, potentially exacerbating instability. Yemen, Sudan, and Somalia, already grappling with armed conflicts, face increased challenges in receiving international aid and a potential surge in the cost of essential goods.

In response to the escalating crisis, a US-led coalition and a recent maritime operation by the EU have been deployed to safeguard ships in the Red Sea. However, with attacks persisting, the outlook remains uncertain. Until a viable solution emerges, the regional economies will continue to bear the economic costs.

The above article was collected and rewritten by the editorial team of Worldcraft Logistics from the Hellenic Shipping New newspaper