Global trade declined by 1.3 per cent from November to December 2023 as militant attacks on merchant vessels in the Red Sea led to a plunge in the volumes of cargo transported in that key region, according to the German economic institute IfW Kiel (IfWK) institute.
Currently, about 200,000 containers are being transported via the Red Sea daily, down from some 500,000 per day in November, the IfW said.
Julian Hinz, director of the IfWK’s trade policy research centre, said diversions in response to the attacks have led to journeys between Asian production centres and European consumers taking up to 20 days longer.
“This is also reflected in the declining trade figures for Germany and the EU, as transported goods are now still at sea and have not already been unloaded in the harbours as planned,” he said.
Shipping giants such as Maersk and Hapag-Lloyd have been sending their vessels on longer, more expensive journeys around South Africa’s Cape of Good Hope.
Iranian-backed Houthi militants in Yemen have stepped up attacks on vessels in the Gulf region in recent months to show their support for Palestinian Islamist group Hamas fighting Israel in Gaza.
By region, the IfWK’s trade indicator for December showed exports from and imports to the EU were down by 2 per cent and 3.1 per cent, respectively.
The US saw a 1.5 per cent drop in exports and a 1 per cent decline in imports, although the Red Sea trade route is less crucial for that country.
China’s trade bucked the trend, with exports up 1.3 per cent and imports up 3.1 per cent. The institute said that was likely down to the upcoming Chinese New Year, starting on February 10.