Houthi attacks ships in the Red Sea, shipping rates increase

Houthi spokesman Yahya Sarea said their forces fired anti-ship missiles at a US vessel named “Mado” in the Red Sea and several missiles at military targets in the southern Israeli city of Eilat, vowing to continue missile and drone attacks until Israel lifts its siege of the Gaza Strip. However, the exact timing of these attacks was not disclosed.

Houthi forces claim to have attacked a ship in the Red Sea. Photo: Arabnews

According to Marinetraffic, Mado is a Marshall-flagged liquefied natural gas (LNG) carrier traveling from Yanbu Port in Saudi Arabia to Singapore.

The U.S. Central Command (CENTCOM) said it conducted “self-defense” strikes that destroyed seven anti-ship missiles, three drones, and three weapons containers in Houthi-controlled areas of Yemen.

Meanwhile, the Houthi accused the US-UK naval coalition in the Red Sea of conducting 10 airstrikes on the Houthi-controlled Yemeni port city of Hodeidah.

Since November 2023, the Houthi rebels have launched attacks on commercial shipping in the Red Sea and the Gulf of Aden, in retaliation for Israeli attacks on the Gaza Strip. In response, the US and UK have conducted airstrikes and missile strikes against Houthi targets in Yemen since mid-January 2024.

Sea freight costs have increased.

The $2,500 spread between spot and long-term contract freight rates for containerized cargo shipped from Asia to the US West Coast is the highest since September 2021, when the spread was $2,900.

This situation is causing shippers to hesitate before signing contracts. Shipping lines want to sign at spot prices, which are rising due to tensions in the Red Sea, while shippers want to wait for prices to fall.

Christian Roeloffs, co-founder and CEO of the container leasing and trading platform Container xChange, noted that the market is experiencing a significant divergence between price expectations from sellers and buyers.

Meanwhile, Peter Sand, an analyst at Xeneta, said that time is on the shipping companies' side, as all contracts signed last year will expire by the end of April. At that point, shippers will have to ship goods at spot rates, which are not a good option at the moment.

" Shippers can manage freight costs through contract terms or clauses regarding freight renegotiation ," Sand emphasized.

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