Fri. Mar 1st, 2024

Attacks in the Red Sea: decline in container transport

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Since November 19, the Houthis have carried out more than 35 attacks on ships in the Red Sea.

Agence France-Presse

Maritime transport of containers by Red Sea has fallen by almost 30% in one year, the International Monetary Fund (IMF) announced on Wednesday, amid an increase in Houthi attacks on merchant ships off the coast of Yemen.

The bulk of Red Sea traffic is in container shipping, which has declined by almost 30%, said Jihad Azour, regional director for the IMF's Middle East and Central Asia, adding that the decline in trade accelerated at the start of 2024.

The IMF's PortWatch platform specifies that the volume of transit through the Suez Canal, which connects the Red Sea to the Mediterranean Sea, fell by 37% from January 1 to 16, 2024 compared to the same period of the year previous.

Since November 19, the Houthis, who control large swaths of Yemen, have carried out more than 35 attacks on ships in the Red Sea and in the Gulf of Aden, according to the Pentagon, disrupting maritime traffic in this crucial area through which up to 12% of world trade passes.

These activists close to Iran say they want to prevent ships linked to Israel from sailing off Yemen, in solidarity with the Palestinians in the Gaza Strip, who have been in the grip of the war between Israel and Hamas since October 7.

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Their attacks forced many shipowners to avoid the sector by bypassing the ;Africa to connect Asia to Europe, at the cost of additional transport costs and longer delivery times.

The degree of uncertainty is extremely high and the evolution of the situation will determine the extent of change and modification of trade patterns in terms of not only volume but also sustainability.

A quote from Jihad Azour, IMF Regional Director for the Middle East and Central Asia

Are we on the eve of a major change on trade routes or is it temporary due to increasing costs and deteriorating security? he asked himself in front of journalists.

The United States, a key ally of Israel, has created a coalition to patrol the Red Sea and to protect maritime traffic from the Houthis, an entity that #x27;they described it as terrorist, without having until then obtained a stop to the attacks.

As for the more general impact of the war between Israel and the Palestinian Islamist movement, the economic slowdown in Gaza and the occupied West Bank is immense, Mr. Azour also noted.

In 2023, GDP in these Palestinian territories is expected to contract by around 6%, according to revised forecasts released Wednesday by the IMF.

We expect the #x27;economy will continue to contract in 2024 if there is not a rapid cessation of hostilities and reconstruction, Azour said.

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