Discover how Iran-backed Houthi rebels’ missile and drone attacks in the Red Sea and Gulf of Aden are causing chaos for global shipping routes. Major vessels, including tankers and container ships, are being rerouted around Africa’s Cape of Good Hope to avoid conflict zones, leading to unprecedented increases in shipping rates and disruptions in supply chains worldwide. With shipping activities measured in ton-miles poised for the largest annual surge since 2010, tensions in the Middle East are not just affecting trade volumes but also highlighting the vulnerabilities of global maritime commerce to geopolitical conflicts.
Missile and drone assaults by Iran-backed Houthi rebels in the Red Sea and Gulf of Aden have interrupted critical marine commerce routes, causing supply chain chaos. Major maritime corporations have been compelled to reroute tankers, bulk carriers, and cargo ships around the Cape of Good Hope to prevent a collision. As a result, shipping prices have risen, and a key indicator of global maritime transport is poised for its greatest yearly gain since 2010.
According to Bloomberg, new data from shipbroker Clarksons Research show that shipping activity measured in ton-miles is on track for the second-largest yearly increase on record, and the highest since 2010. This is primarily due to instability at crucial maritime chokepoints around the Middle East.
The worldwide sea transport gauge, which multiplies the volume of cargo transported by the distance sailed, is on track to expand by 5.1% from 2023, or 3.2 trillion ton-miles. The increase in the index occurs as vessels are redirected from the Red Sea to the Cape of Good Hope, adding thousands of miles and weeks to the journey from Asia to Europe.
Attacks in the Red Sea and Gulf of Aden have only intensified in recent weeks. Houthi militants have launched boat drone assaults on commercial boats belonging to Western nations.
According to Clarkson analyst Trevor Crowe, longer journeys have proven unsatisfactory in terms of lowering global carbon emissions. Meanwhile, he stated that an “encouraging start to the year” in trade volumes is driving up ton-miles, implying that the increase is not solely attributable to longer voyages.
According to Bloomberg: “The impact of the Red Sea disruption on ton miles has been most acutely felt in container shipping, with about 690 ships currently sailing around the Cape of Good Hope,” indicating, “Average seaborne trade hauls will rise by 2.8% this year compared with 1.8% a year earlier.”
As previously said, a more traditional supply shock is underway—nowhere near the nuclear intensity caused by government-imposed lockdowns a few years ago. This has put pressure on worldwide containerized transportation capacity, with costs for 40-foot boxes skyrocketing in recent months.
Rising geopolitical tensions in the Middle East indicate more supply chain disruptions. This highlights the ongoing need to strengthen supply chain resilience through reshoring production.
Recently, GreatGameIndia reported that chaos in the Red Sea escalated as Houthi rebels sank the dry-bulk freighter Tutor using a kamikaze drone boat, causing commercial shipping costs to soar. Insurance rates for vessels now reach 6% of their value, impacting global containerized freight and port operations.
