Red Sea Attacks Drive Up Asia-Morocco Shipping Costs by 60-100%

Monday 08 January 2024 - 15:09

A recent surge in attacks on commercial ships transiting the Red Sea has prompted shipping companies to impose substantial surcharges on Asia-Morocco cargo routes over the past three weeks. According to Rachid Tahiri, president of Morocco's Association of Freight Forwarders, rates for a standard 20-foot container from Shanghai to Casablanca have surged from $1,450 to as much as $2,800 since December 15.

These attacks have been attributed to Houthi rebels in Yemen, who initiated the assaults in solidarity with Hamas militants in Gaza amid recent clashes with Israel. In response, nearly 20 shipping firms have opted to navigate alternative routes, circumventing the Red Sea and adding up to 10 days to transit times as vessels divert around the Cape of Good Hope in South Africa.

Tahiri expressed concern that the rate spikes may jeopardize the import and export of time-sensitive goods, such as tomatoes and fish, if the instability persists. The Red Sea is a critical chokepoint, handling 8% of the global cereal and liquefied natural gas trade and 12% of maritime oil shipments.

To counter this threat, the U.S. has formed a 20-nation military coalition known as Operation Prosperity Guardian. However, a defiant unmanned Houthi attack vessel recently approached within miles of the task force before detonating, indicating the rebels' willingness to continue disrupting one of the world's busiest shipping lanes.

The volatility in rates has left Tahiri uncertain about whether charges will stabilize by mid-month. He remarked, "We will wait and see," while cautioning that prolonged attacks could render some Moroccan imports and exports economically "vulnerable."