By Ovunc Kutlu
ISTANBUL (AA) - Reduced shipping via the Red Sea and re-routing around Africa has led to volumes being redistributed from ports in the affected area to terminals in the United Arab Emirates and Africa, Fitch Ratings said Thursday.
"Re-routing and a decline in shipping capacity between Europe and the Far East are leading to losses in volumes for the ports on the Red Sea coast and near the Suez Canal and creating congestion in the terminals alongside alternative routes," it said in a statement.
"Transshipment volumes of port operators in Egypt, Saudi Arabia and Turkiye are particularly affected, while origin and destination (O&D) shipments are more stable, supported by transportation demand from hinterland areas that are difficult to satisfy using alternative routes," it added.
The rating agency said it expects the disruptions to be temporary, as a US-led coalition is trying to establish safe transit for commercial ships in the area.
It warned, however, that a period of prolonged disruptions may lead to greater supply chain pressures and more severe operational consequences.
Yemen’s Houthi group has been targeting commercial vessels in the Red Sea, particularly those bound for Israel, since November. They said the attacks aim to put pressure on Israel to halt its deadly onslaught on the Gaza Strip. That has prompted the US and UK to launch retaliatory airstrikes against targets inside Yemen.
The Red Sea is one of the world's most frequently used sea routes for oil and fuel shipments.