Ships not linked to Israel could begin returning to the Red Sea in as little as two weeks, potentially leading to a significant drop in freight prices, according to Yuvraj Narayan, deputy chief executive of DP World.
Narayan told Reuters at the World Economic Forum in Davos, Switzerland, that freight prices could decline "at least 20%, 25%" over the next two to three months. This anticipated price drop follows the Houthi militia's announcement that they will limit their attacks on commercial vessels to those linked to Israel.
"It is hard to predict a specific timeline," Narayan acknowledged. However, the Yemen's Houthi's decision to potentially halt all attacks once the Gaza ceasefire is fully implemented could significantly impact global shipping routes.
The Iran-backed Houthis have conducted over 100 attacks on ships since November 2023, including sinking two vessels, seizing another, and killing at least four seafarers. These attacks have forced many shipping companies to reroute vessels around the southern tip of Africa, leading to a significant increase in shipping times and costs. "That has tied up at least 30% more capacity than usual," Narayan stated.