Red Sea attacks: Slight fall in shipping costs but still over 300% more expensive than November - fuelling inflation fears

Typical shipping prices are 329% more expensive since disruption began in the key Red Sea shipping route in November, new figures show.

It now costs on average $3,030 (£2,391) to send a container from Shanghai to Europe, up from $707 (£558) in mid-November, before Yemeni Houthi fighters began capturing and firing on freight ships in an effort to prevent shipments to Israel in retaliation for the bombardment of Gaza.

Major container shipping and fossil fuel companies diverted vessels from the area in response, adding up to 14 days to journey times and upwards of £1m in costs as ships travelled a longer way, via South Africa, to reach Europe.

It prompted fears that inflation could rise as most items spend some part of their supply chain life at sea.

But weekly published data showed a slight decrease in costs on Friday compared to seven days earlier.

The most widely used measure of freight cost, the Shanghai Containerised Freight Index (SCFI), fell from $3,101 (£2,447) per container on 12 January, to $3,030 (£2,391) on 19 January, according to data given to Sky News by global logistics company, DSV.

The number of vessels going through the area has dropped by hundreds, according to Lloyd's List, the 287-year-old provider of shipping data and news to the maritime industry.

In the second week of 2024, ending 14 January, 290 vessels travelled through the Red Sea to access the major shipping pathway of the Suez Canal, down from 470 in the week when Houthis attacked a cargo ship.

The largest falls by vessel type were gas carriers.

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Traffic is likely to have fallen further as this week QatarEnergy halted Red Sea shipments and reports emerged that fossil fuel giant Shell had done the same.

Costs, however, remain below the highs seen after the Ever Given container ship was wedged in the Suez Canal, halting travel and heralding the first wave of inflation.