Rising shipping costs to Israel amid conflict and Houthi attacks

20 Dec 2023 CW Team

The recent days have seen an increase in the shipping costs of goods to Israel by sea, with some container lines withdrawing and others introducing additional surcharges. This is contributing to supply chain challenges for the country amid the conflict in Gaza, according to shipping sources.

Israel, heavily dependent on seaborne trade, had announced in October that it would compensate for ships damaged during the conflict with the Hamas group. However, it has not specified whether it will cover additional shipping expenses.

Houthi militants in Yemen, backed by Iran, have intensified attacks on vessels in the Red Sea to express support for Hamas following the onset of Israel's military offensive in Gaza. In response, some shipping companies have rerouted sailings around the Cape of Good Hope or suspended transits through the Red Sea. The attacks have added pressure to companies still providing sea transport to Israel.

The Houthis have expanded their target criteria to include vessels that were no longer associated with Israel, according to British maritime security company Ambrey.

Ocean freight rates from various Chinese ports to Israel rose to over $2,300 for a 40-foot container by December 12, compared to around $1,975 at the end of November, according to analysis from global freight platform Freightos. Freightos CEO Zvi Schreiber noted that the route around Africa is significantly longer and incurs higher fuel costs compared to the Suez Canal route.

Evergreen Line and OOCL have temporarily stopped accepting Israeli cargo due to operational issues, while AP Moller-Maersk has imposed an emergency risk surcharge for all cargo discharged at Israeli terminals.

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