Red Sea attacks impacting global trade as more shippers ban the area due to Houthi militants

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Heritage Foundation senior fellow Brent Sadler reacts to BP pausing Red Sea oil shipments after Houthi attacks on Varney & Co.

Global trade disruptions caused by the exodus of shipping companies from the Red Sea are beginning to show and expected to get worse as more major shippers reroute their vessels away from the area to avoid attacks from Yemen's Iran-backed Houthi militants.

Container xChange, a global platform for facilitating container leasing and trading, reported Wednesday that some of the main ports in Germany are posting significant week-on-week price increases, saying the interpretation is that the situation in the Red Sea has contributed to the surge.

The tanker Island Challenger is moored off the coast of the Mediterranean port of Limassol. Cyprus, Friday, Dec. 15, 2023. The Cyprus Chamber of Shipping has expressed deep concern about recent attacks by paramilitary forces in Yemen on commercial sh (Danil Shamkin/NurPhoto via / Getty Images)

«The market anticipates that especially in Europe – which is on the receiving end of import containers from the Middle East, India, southeast Asia and China – that container scarcity will lead to an increase in container prices and the market,» Container xChange CEO Christian Roeloffs said in an analysis.

Roeloffs said there has been a consistent jump in the surge of freight rates, too, pointing to a Xeneta report indicating a spot rate increase of 20% to 30% on major East-West corridors.

FEARS OF HIGHER OIL, GAS PRICES RISE AS SHIPPERS AVOID RED SEA DUE TO HOUTHI ATTACKS

The impacts are already being felt after major shippers, including Hapag Lloyd, MSC, Maersk and BP, announced in the past several days they would be avoiding the Red Sea due to the attacks.

Now, the