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The impact of Houthi attacks in the Red Sea on Canadian shipping companies

The impact of Houthi attacks in the Red Sea on Canadian shipping companies

By Mohamed nasar

Published: January 16, 2024


Canadian shipping companies have begun to feel the pressure due to the Houthi attacks on cargo ships in the Red Sea, while container tariffs are rising and ship arrivals on the east coast are experiencing delays.

Data from the Halifax port shows that 57 out of 87 ships, nearly two-thirds, that were scheduled to arrive at this port on Canada’s Atlantic coast over the next four weeks are now expected to arrive at least one day late and several weeks late in some cases.

According to the Drewry research office, the shipping container rate has doubled since mid-December, when the Houthi militants in Yemen intensified their attacks on commercial ships in the Red Sea in protest against the Israeli military campaign in the Palestinian Gaza Strip.

On Friday, the United States and the United Kingdom carried out air strikes against the Houthi rebels in an operation that included planning support from the Canadian Armed Forces.

Today, the Houthis launched a missile that hit an American cargo ship, less than a day after they fired an anti-ship cruise missile at an American destroyer in the Red Sea.


The scale of the conflict has pushed major container shipping companies to avoid passing through the Suez Canal and instead choose the route around the Cape of Good Hope in South Africa, which adds between one and two weeks to the journey time and increases costs related to fuel, crew, and insurance.

"The global maritime shipping industry is affected by the situation in the Red Sea, and we have started to notice delays due to shipping companies using alternative routes around Africa," said Paul MacIssac, First Vice President of Halifax Port, in a press statement.

However, some experts warn against overestimating the impact of what is happening in the Red Sea, noting that schedules at the Port of Montreal in eastern Canada and at west coast ports remain largely unchanged so far.

"Given that the Red Sea/Suez Canal is a trade route largely serving Europe and the east coast of North America, it is not expected that transit distances across the Pacific Ocean will be affected by the current situation," said Alex Munro, spokesperson for the Vancouver Port Authority.

But cascading effects, including impacts on prices, are possible.

Shipping rates from East Asia to the west coast of the United States rose by 56% within one month on Thursday, according to shipping analytics company Xeneta.

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