Ships not connected to Israel may start returning to the Red Sea in just two weeks, said Yuvraj Narayan, executive vice president of DP World, adding that this could push shipping rates “severely lower.”
Reuters quoted Narayan as saying on the sidelines of the World Economic Forum meetings in Davos, Switzerland, that sea freight rates may decline by “at least 20 or 25%” over a period of two to three months.
But the Executive Vice President and Chief Financial Officer of the Dubai-owned company added that it is difficult to predict a specific time frame.
Reducing attacks
The Yemeni Houthi group said last Sunday that its attacks on commercial ships would be limited to those linked to Israel, and that it would consider stopping the attacks completely once the ceasefire agreement in the Gaza Strip was fully implemented.
The Houthi group has launched more than 100 attacks on ships since November 2023, resulting in the sinking of two ships and the seizure of the Galaxy Leader (the release of its crew was announced today).
This prompted many of the world’s major shipping companies to change the course of their ships to sail around southern Africa instead of the Red Sea.
This resulted in a loss of at least 30% more charging capacity than usual, Narayan said.
He pointed out that shipping prices are expected to decrease once we return again to the Red Sea route and the Luxor Suez Canal.
