Enlarge image

Cargo ship in the Suez Canal: The number of ships arriving in the North Sea has fallen by a quarter

Photo: Mohamed Hossam / EPA-EFE

The attacks by the Houthis have further reduced the amount of cargo transported across the Red Sea to Europe. According to data from the Kiel Institute for the World Economy (IfW), over 80 percent fewer containers are currently passing through the Strait and the Suez Canal than would actually be expected.

The decline is also noticeable on German coasts. In ports such as Hamburg and Bremerhaven, the number of arriving ships has fallen by 25 percent, it is said, citing the Kiel Trade Indicator for the month of January 2024.

The Kiel Trade Indicator estimates the imports and exports of 75 countries and regions worldwide as well as global trade. The basis is the evaluation of ship movement data in real time. An algorithm programmed at the IfW Kiel evaluates these using artificial intelligence and translates the ship movements into price and seasonally adjusted growth values ​​compared to the previous month. The algorithm evaluates the position data of container ships in real time in 500 ports and 100 sea regions worldwide.

“Situation looks more dramatic than it is in terms of the economy as a whole”

The reason for the drop in freight volumes is the detour that numerous container ships are now taking because of the attacks. Instead of going through the Red Sea and the Suez Canal, many people now take the much longer route around the Cape of Good Hope - this means a detour of around two weeks. Typically, almost ten percent of all German imports and exports are transported through the Suez Canal; the shipping route was once one of the busiest in the world.

more on the subject

  • Conflict in the Middle East: Houthis attack freighters in the Red Sea again

  • Attacks on freighters in the Red Sea: "Container ships cannot defend themselves against cruise missiles" An interview by Alexander Preker

  • Attacks by the Houthis: Why China is so conspicuously holding back in the Red SeaBy Georg Fahrion, Beijing

Despite several air strikes, the armed forces of the USA and Great Britain have apparently not been able to ensure "more security" on the route, said Julian Hinz, research director for trade policy at the IfW. According to Hinz, long-term disruptions to supply chains or trade relationships such as those experienced during the Corona crisis are not to be expected.

“But the current situation looks more dramatic than it is in terms of the economy as a whole,” he said. Because the ships are traveling longer, there is currently a gap in many European ports. "But this should return to normal as soon as the longer route has been logistically planned."

The Houthis have repeatedly attacked Western freighters in the Red Sea in recent months. They claim to specifically attack ships that have ties to Israel. They claim to support Hamas terrorists. The USA and Great Britain have repeatedly responded to the Houthi attacks with counterattacks on positions of the Iranian-backed militia. Just this week, another freighter was attacked.

A look at the amount of goods sent worldwide shows that the drop in arrivals in Hamburg, but also in Bremerhaven, is likely to be a temporary phenomenon. This even increased in January before the high-sales Chinese New Year: According to the Kiel Trade Indicator, the number of standard containers shipped was more than 14 million – close to the previous high of around two years ago. Hinz: »Above all, the amount of goods shipped worldwide shows that world trade is not in a crisis, but has remained stable. Although individual companies may suffer from delivery delays, overall no shortages of intermediate products or consumer goods are to be expected.

However, the detour around the Cape has led to a sharp increase in freight rates. In January, according to the IfW, the transport of a standard container - unless there were longer-term delivery contracts with more favorable conditions - cost more than $5,000. For comparison: at the end of 2023 it was around $1,500. However, prices have now fallen again by around 15 percent. However, the increase in freight prices is unlikely to have any profound economic consequences. Freight costs only make up a very small proportion of the product price - and for the shipping companies the detour can even be worthwhile, at least financially.

Apr