Red Sea Shipping Woes Driving Freight Rates Up Faster Than During COVID-19

Xeneta, an Oslo-based freight benchmarking firm, reports that attacks by Iran-backed Houthi rebels against shipping in the Red Sea has led to a more rapid increase in freight rates than during the initial months of the COVID-19 pandemic, according to maritime news outlet gCaptain.

While rates are still not as high as they were during the pandemic, the danger to ships and uncertainty have led to a more rapid increase. People in the industry are reportedly divided on whether this increase will last or eventually stabilize and even go down, and some are suspicious that those in charge of setting rates are unnecessarily increasing prices to take advantage of the crisis.

Insurance companies have already begun to refuse to ensure ships going through the Red Sea who might be targeted by Houthi missiles and drones, and underwriters are reportedly even insisting ships disavow any connection to Israel, the US, and the UK, according to gCaptain.