Container freight rates are surging as attacks by Yemen-based Houthi rebels on cargo ships in the Red Sea have forced shipping giants to send vessels around southern Africa's Cape of Good Hope, Reuters reported on Thursday.
According to data tracked by the international shipping marketplace Freightos, Asia-to-North Europe rates have more than doubled to over $4,000 per 40-foot container this week, while prices for Asia-to-Mediterranean shipping have climbed to $5,175.
Some carriers have announced rates above $6,000 per 40-foot container for Mediterranean shipments starting mid-month, and surcharges of $500 to as much as $2,700 per container could make all-in prices even higher, according to Judah Levine, Freightos' head of research, as cited by the agency.
The price leap is attributed to attacks carried out by Yemen-based Houthi militants across a key artery leading to the Suez Canal, and have so far forced global shipping majors to send cargo ships on the long journey around Africa. The prolonged voyages last up to 20 days more, and are leading to a shortage of container ships.
“People desperate to get space (on ships), are going to pay,” Christian Sur, executive vice president for ocean freight at Unique Logistics, told the agency.
Freight rates for shipping to North American ports have been less affected, but have also risen.
Rates for shipments from Asia to North America's East Coast have surged 55% to $3,900 per 40-foot container, while West Coast prices have soared 63% to over $2,700 ahead of expected cargo diversions to avoid Red Sea-related issues, according to Levine.
On Tuesday, US Central Command said a US destroyer on patrol in the Red Sea shot down two ballistic missiles fired from Houthi-controlled areas of Yemen, while it was responding to a report that a commercial vessel had been struck by a missile.
The attacks on vessels in the Red Sea area are being carried out by Yemen-based Houthi rebels, who claim they are acting in support of Hamas, following the escalation of hostilities between Israel and the Palestinian armed group in Gaza.
For more stories on economy & finance visit RT's business section