Freight rates could surge 25-30% if trouble along Red Sea route continues
Freight rates could surge 25-30% if trouble along Red Sea route continues
The disruption assumes significance as Bab-el-Mandeb Strait, which connects the Mediterranean Sea to the Arabian Sea via the Red Sea and the Suez Canal, is vital for 30 per cent of global container traffic and India relies on the route to trade with parts of West Asia, Africa, and Europe.
Freight rates for Indian shipments headed to Europe and Africa could surge as much as 25-30 per cent if the ongoing security concern along the Red Sea trade route – the shortest trade route for ships moving from Asia to Europe – were to continue, according to Indian merchandise exporters.
The disruption assumes significance as Bab-el-Mandeb Strait, which connects the Mediterranean Sea to the Arabian Sea via the Red Sea and the Suez Canal, is vital for 30 per cent of global container traffic and India relies on the route to trade with parts of West Asia, Africa, and Europe. It also comes at a time when exports are already slowing due to sluggish global demand.