Container ships are abandoning the Red Sea in droves. Houthi rebel attacks on commercial vessels have made the traditional Suez Canal route too dangerous for many shipping lines, triggering the biggest rerouting of global trade since the canal’s 1869 opening.
The Security Situation
Since November 2023, Yemen’s Houthi rebels have launched over 100 attacks on commercial ships transiting the Red Sea and Gulf of Aden. Using drones, missiles, and small boats, the Iran-backed group claims to target vessels with Israeli connections, though many attacked ships have no obvious link to Israel.
Several ships have been hit, with the cargo vessel Rubymar sinking after a missile strike. Crews have been injured, and the psychological toll on seafarers transiting these waters has been significant.
The Cape of Good Hope Alternative
Major container lines including Maersk, MSC, Hapag-Lloyd, and CMA CGM have rerouted vessels around Africa’s Cape of Good Hope. This adds approximately 3,500 nautical miles and 10-14 days to voyages between Asia and Europe.
The longer route increases fuel consumption by 40%, adding hundreds of thousands of dollars in bunker costs per voyage. Ships also require more crew provisions and face additional wear on engines and hull.
Freight Rate Impacts
Spot container rates from Asia to Europe have surged over 300% from pre-crisis levels. A 40-foot container that cost $1,500 to ship in October 2023 now costs $6,000 or more. These increases inevitably flow through to consumer prices.
The rate spike has been a windfall for container lines that locked in favorable charter rates, while shippers with spot market exposure face budget-busting logistics costs.
Naval Response
The US and UK have conducted airstrikes on Houthi positions in Yemen, attempting to degrade the group’s missile and drone capabilities. A multinational naval task force patrols the Red Sea, but the vast area makes comprehensive protection impossible.
Some shipping lines have attempted Red Sea transits with naval escort, but most have concluded the risk isn’t worth it when the Cape route, while expensive, is reliably safe.
Looking Ahead
Maritime security experts see no quick resolution. The Houthi attacks are tied to the broader Gaza conflict, and the group has shown no willingness to stand down. Shipping lines are planning for Red Sea diversions to continue through 2025 and potentially beyond.
