According to UN trade expert Jan Hoffmann, following Yemen’s Houthi attacks on ships in the Red Sea that have taken place since November 2023, major players in the shipping industry have temporarily stopped using the Suez Canal, a vital energy and cargo route between Asia and Europe. The canal was expected to account for between 12% and 15% of global trade in 2023, but trade through the waterway has fallen by 42% in the past two months.
He added that the war that continues after the invasion by the Russian Federation in Ukraine and other geopolitical challenges have changed the trade of oil and grain.
He also noted that shipping companies’ operations have been complicated by a severe drought, which has led to a drop in the Panama Canal’s water level to the lowest level in decades. Total transit through the Panama Canal in December was 36% lower than a year ago and 62% lower than two years ago. At the same time, ships currently transport about 80% of goods in world trade.