Sea freight prices could drop by as much as 25% within a few months if Red Sea attacks are controlled, DP World’s deputy chief executive told Reuters. The shipping giant emphasized the impact of disruptions caused by Houthi attacks on vessels, which have forced companies to reroute ships around Africa, significantly increasing costs.
Since November 2023, Yemen’s Iran-backed Houthi forces have targeted over 100 ships in the Red Sea. According to the report, these attacks have created widespread safety concerns and led to rising freight prices as companies avoid the area. Narayan believes stopping these attacks would allow vessels to resume using the Red Sea and Suez Canal, cutting transportation costs. “If we can stabilize the region, we could see prices falling by 20 to 25% within the next two to three months,” he said.
To address the disruptions, the U.S. has taken action against entities linked to the Houthis. On January 17, the U.S. sanctioned Yemen Kuwait Bank, accusing it of laundering money for the group. Additionally, on January 22, President Donald Trump re-designated Yemen’s Houthi movement as a terrorist organization, imposing stricter economic penalties on the group. These measures aim to pressure the Houthis into halting their maritime attacks.
Narayan expressed cautious optimism, noting that if the situation stabilizes, ships not connected to Israeli trade could return to the Red Sea within two weeks. Restoring normal shipping routes would ease costs and help normalize global trade disrupted by the ongoing conflict.