 "Suez Canal")
The latest threat by Houthi insurgents to disrupt shipping headed to and from the United States and Europe through the Suez Canal has begun to make an impact on Indian shipping as well, industry insiders have said.
“While the joint bombing by the United States and United Kingdom on Houthi insurgents had stabilised the situation, the Houthis have stepped up attacks in the past few days. As a result, we expect further diversions of ships towards the Cape of Good Hope route around Africa,” Dushyant Mulani, Chairman of the Federation of Freight Forwarders Association of India said.
US and British forces had carried out a series of airstrikes on Houthi assets on both land and sea beginning Friday.
“While the rate of increase in freight charges varies between shipping lines, charges for goods headed to and from India have gone up between 15-65 percent in the past one week,” Mulani said.
Since October, the group has launched dozens of attacks on maritime vessels, mostly in the lower Red Sea and wider Arabian sea region.
The group does not maintain physical presence on both sides of the Suez Canal and the Gulf of Suez, both sides of which belong to Egypt. But the threat of attacks has already compelled major shipping lines to ditch the Suez Canal route in favour of a much longer journey around Africa, people in the know said.
"While the rate of increase in freight charges varies between shipping lines, charges for goods headed to and from India have gone up between 15-65 percent in the past one week," Mulani said.
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The Red Sea crisis has also had an impact on wider freight rates. "Many shipping lines have jacked up charges even on routes far from the affected area. Charges for hauling cargo from Singapore and Malaysia have also increased," a senior industry official said under conditions of anonymity.
The Red Sea route accounts for 12 percent of global maritime trade, and upto 40 percent of trade between Asia and Europe.
On Monday, international agencies reported that Qatar has stopped sending tankers carrying liquefied natural gas (LNG) through the Red Sea. The country is the second largest LNG exporter in the world.
Officials at the Ministry of Petroleum and Natural Gas said the decision will not affect shipments to India, which travels through the Persian Gulf to gas terminals on the western coast. But it is expected to overall raise shipping costs for LNG.
