LONDON - Container shipping rates for key global routes have soared this week, with US and UK air strikes on Yemen stirring concerns of a prolonged disruption to global trade in Red Sea, one of the world’s busiest routes, industry executives said on Friday.
US and British warplanes, ships and submarines launched dozens of strikes across Yemen overnight in retaliation against Iran-backed Houthi forces for attacks on Red Sea shipping, widening the regional conflict stemming from Israel’s war in Gaza
The benchmark Shanghai Containerized Freight Index was up over 16% from a week earlier to 2,206 points on Friday.
Rates on the Shanghai-Europe route rose 8.1% to $3,103 per twenty-foot equivalent unit (TEU) on Friday from a week earlier, while the rate for containers to the US West Coast soared 43.2% to $3,974 per forty-foot-equivalent-unit (FEU), the ship broker Clarksons said on Friday.
“The longer this crisis goes on, the more disruption it will cause to ocean freight shipping across the globe and costs will continue to rise,” Peter Sand, chief analyst at the freight platform Xeneta, said in Friday.
“We are looking at months rather than weeks or days before this crisis reaches any kind of resolution,” he said, referring to the growing conflict.
The US-British strikes on Iran-backed Houthi forces in Yemen had “good effects”, Pentagon spokesman Patrick Ryder said on Friday, adding that their militaries would continue to monitor the situation for any retaliatory strikes.
There are currently no plans to send additional US troops to the region, Ryder said in an interview with CNN.
“Our initial assessment is that we had good effects,” he said. “We will continue to monitor and as the president and (Defense) Secretary Austin have said, we will continue to take necessary action.”
Asked about worries that the conflict might escalate, Ryder said the US continues to work to contain the Israel-Hamas war in Gaza.