The unrest around the Bab-el-Mandeb Strait, exacerbated by recent attacks from Houthi militants, is impacting India’s export landscape. Shippers are rerouting consignments through the Cape of Good Hope due to reduced movement through the Red Sea, causing delays of nearly 14 days and escalating freight and insurance expenses.
Concerns regarding these challenges were addressed in a high-level meeting at the commerce ministry on January 4, involving stakeholders such as traders, shippers, container firms, and freight forwarders.
Export destinations to Europe, the US East Coast, and Latin America are particularly affected. Shippers are opting for the longer Cape of Good Hope route to circumvent potential disruptions in the Red Sea, leading to increased turnaround times and elevated insurance costs.
While the Bab-el-Mandeb Strait, Suez Canal, and Red Sea route is faster, recent events have compelled shippers to choose the longer, albeit more secure, Cape of Good Hope route, impacting the efficiency of major Indian ports like Mumbai, JNPT, and Chennai.