The volume of commercial traffic passing through the Suez Canal has witnessed a significant decline of over 40 percent in the last two months following attacks by Yemen’s Houthi rebels, as reported by the United Nations. This development is raising concerns for global trade, with the Iran-backed Houthis claiming they are targeting what they consider Israeli-linked commercial and military shipping in the region in solidarity with Palestinians in Gaza. This has prompted some cargo carriers to opt for longer and more expensive routes to avoid potential attacks.
“We are very concerned that the attacks on Red Sea shipping are adding tensions to global trade, exacerbating (existing) trade disruptions due to geopolitics and climate change,” stated Jan Hoffman, head of the UN Conference on Trade and Development (UNCTAD), during a press briefing on Thursday.
According to UNCTAD, the diversion of ships from the Red Sea—choosing to sail around South Africa’s Cape of Good Hope—has resulted in a 42 percent drop in transit through the Suez Canal in the last two months. The Suez Canal, located in Egypt, serves as a vital link connecting the Mediterranean Sea with the Red Sea, facilitating more than 80 percent of the volume of international goods trade.
“Maritime transport is really the lifeline of global trade,” emphasized Hoffman, noting the severe impact on trade disruptions due to the decline in transits.
The UNCTAD reported a 67 percent year-on-year decrease in the number of weekly container ship transits through the Suez, considering that over 20 percent of the world’s container trade passes through the canal. Larger container ships, in particular, have witnessed a substantial decline in carrying capacity due to diversions.
Tanker traffic through the Suez has decreased by 18 percent, bulk cargo ships carrying grain and coal are down by six percent, and gas transport has come to a standstill, indicating a broader impact on various sectors of global trade.
