The cost of international shipping has shot up as businesses prepare to ship goods for the festive season far earlier than usual, in a sign of the far-reaching effects of disruption from attacks in the Red Sea.
Kenya Ships Agents Association (KSAA) on Wednesday said importers should expect higher charges from this week as stakeholders assess the increasing insecurity from Yemen Houthis’ claim of fresh Red Sea attacks on British and American ships.
The average cost of shipping a 40ft container between the Far East and northern Europe at short notice, the figure that is most sensitive to market prices, hit $4,343 last week, roughly three times higher than the same period last year, according to freight market tracker Xeneta.
Prices have not yet surpassed the peak seen immediately after Yemen’s Houthi militant group began targeting vessels in November. But they are rebounding during a usually quiet period for shipping in the spring months.
Typically the peak period occurs between late summer and autumn, when retailers start importing goods for the November Black Friday sales and Christmas shopping season.
“The peak season has been brought forward,” said Michael Aldwell, head of sea logistics at Kuehne + Nagel, one of the large freight forwarders that handles goods and sets the price of shipping for retailers.
“Despite efforts to normalise freight rates following events such as the Covid-19 pandemic and the Russia-Ukraine War, the ongoing attacks by Houthi Rebels present a persistent challenge.”
"Major shipping lines, including those represented by KSAA, are responding by rerouting vessels around the Cape of Good Hope, a costly alternative that directly impacts the business community and consumers in East Africa,” Says KSAA Chief Executive Officer Juma Ali Tellah
The Red Sea has remained a biggest worry by shippers resulting to the rerouting of vessels to take a longest route via Southern of Africa while some vessels are attempting to mask their positions by pinging on other locations, as a safety precaution when entering the Yemen Coastline.
