Malta Suffers Brunt Of 33% Drop In Suez Canal Trade
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Ongoing assaults by the Houthi rebel group on commercial vessels have disrupted vital maritime routes in the Red Sea, with a reported drop of around 33% drop of trade passing through the Suez Canal and ultimately the Mediterranean.
In an exclusive interview, Godwin Xerri, Managing Director of Focal Maritime and Chairman of the Malta Maritime Forum explains that most of these ships would be sailing by Malta, making it realistic to assume that some of these vessels would have either called in Malta for cargo operations or else stopped off Malta for bunkering and supplies.
Situated just south of the Suez Canal, this waterway serves as one of the busiest and most densely trafficked shipping lanes worldwide, facilitating efficient access for Europe to eastern and southern trade routes.
According to the United Nations, roughly 22% of global seaborne container trade traverses through the Suez Canal. With the escalation of these attacks, many ships are now avoiding the Suez Canal, opting for a longer route around Africa.
Adding to this, credit rating agency Ind-Ra, estimates that the Red Sea disruptions have increased freight costs by 25-30 per cent, particularly with many container ships now taking a much longer route around the Cape of Good Hope in South Africa.
The United Nations said last month that the average container shipping spot rates originating from Shanghai in early February 2024 witnessed a significant surge, more than doubling by 122% compared to early December 2023. Specifically, rates from Shanghai to Europe experienced an even more pronounced increase, more than tripling with a staggering jump of 256%.
The Red Sea plays a vital role in global trade, accommodating approximately 12% of total global trade, amounting to roughly $1 trillion.
