Red Sea attacks drove 90% decline in container shipping, US intelligence agency says

Houthi attacks on commercial vessels in the Red Sea led to a 90 per cent decline in container shipping through the area between December 2023 and February, US intelligence officials said in their first formal assessment of the rebel campaign’s economic impact.

The attacks impacted at least 65 countries and forced at least 29 major energy and shipping companies to alter their routes, according to the rare public assessment by the Pentagon’s Defence Intelligence Agency.

Alternate shipping routes around Africa added around 20,400km to each journey, increasing fuel costs by approximately US$1 million (S$1.36 million) for each voyage. 

“Threats to Red Sea transits are compounding ongoing stress to global maritime shipping caused by interruptions at the Panama Canal due to drought,” the agency said.

The US and Britain have launched repeated air strikes on the Yemen-based Houthis in a bid to curtail their ability to target ships in the region, while also looking to block their revenue sources and impose other financial sanctions. So far, though, the group has been undeterred, and the economic fallout has continued to widen.

The Houthis began launching the attacks in 2023 to put pressure on Israel and its allies over

the war in the Gaza Strip.

On June 28, a commodities carrier called Tutor suffered severe flooding in its engine room following the first successful attack from a seaborne drone during the current Houthi campaign, and a small cargo ship was on fire on June 27 after being hit by two projectiles. 

The Red Sea attacks have also impacted humanitarian relief efforts. Aid for Sudan and Yemen has been delayed by weeks as a result of longer routes around Africa, the report said. BLOOMBERG