Indian Transport & Logistics

US, UK impose sanctions on 4 Houthi leaders, Red Sea attacks continue

Drewry’s World Container Index increased 5% to $3,964 per 40ft container for the week to January 25, 2024

US, UK impose sanctions on 4 Houthi leaders, Red Sea attacks continue
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The United States, jointly with the United Kingdom, imposed sanctions on four military officials of Ansarullah, commonly known as the Houthis, who have supported the Houthis’ recent attacks in the Red Sea and Gulf of Aden.

The Houthis’ terrorist attacks on merchant vessels and their civilian crews in the Red Sea and the Gulf of Aden have disrupted international supply chains and infringed on navigational rights and freedoms, says a statement from the U.S. Department of State. "The United States is committed to safeguarding international commercial trade and taking action alongside our allies and partners to safeguard the safety of these critical waterways."

The U.S. had earlier declared Houthis as Specially Designated Global Terrorist, effective February 16, 2024.

Those sanctioned were Houthi Defence Minister Mohamed Nasser al-Atifi, Commander of Houthi Naval Forces Muhammad Fadl Abd Al-Nabi, coastal defence forces chief Muhammad Ali al-Qadiri and Muhammed Ahmad al-Talibi, who the two governments described as the Houthi forces' director of procurement, Reuters reported.

The United Kingdom Maritime Trade Operations (UKMTO), in a post on X on January 26, 2024, said it has received a report of an incident 60 NM South West of Aden, Yemen.

"Master reports 2 missiles exploding in the water a distance of the port quarter. Master reports vessel and crew are safe and no damage reported."

Freight rates continue to rally
Drewry’s World Container Index increased five percent to $3,964 per 40ft container for the week to January 25, 2024. The index is up 94 percent when compared with the same week last year, highest since October 2022 and is 179 percent more than average 2019 (pre-pandemic) rates of $1,420.

"Freight rates on Shanghai to Los Angeles increased by 13 percent to $4,344 per 40ft container, followed by rates on Shanghai to New York that increased nine percent to $6,143 per 40ft box."

Drewry expects spot rates to plateau or decline in the next few weeks on the routes from Asia.

Shanghai Containerized Freight Index (SCFI) spot rates are declining for the second week, writes Lars Jensen in his LinkedIn post. "The overall SCFI index dropped -3% compared to last week, making this the first week that the overall index declined since the outbreak of the Red Sea crisis."

Focus on backhaul rates
"Since the escalation in the Red Sea crisis in mid-December last year, focus has been on the main fronthaul trades out of Asia into the Mediterranean, North Europe and the U.S. East Coast but, as is always the case with ocean freight shipping, there is more to consider.

"Let’s not forget about the backhauls. Freight rates may react a little slower than their fronthaul counterparts but they still demand our attention, not least due to the huge volumes of goods shipped on these trades," says Xeneta in its latest update.

Spot rates out of North Europe have jumped from $422 per FEU on December 31, 2023 to $709 on January 4, 2024 (+68 percent), the update added. "Since then, they have increased a further nine percent to $770 as of January 24, 2024.

"From the Mediterranean to the Far East, spot rates increased from $706 per FEU on December 31 to 1022 on 4 January 4, 2024 (+45 percent), before increasing another 12 percent to $1,146."

Regardless of backhaul rates, carriers will be looking to get vessels back to the Far East ahead of the Lunar New Year demand spike, the update added.

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