Ocean freight rates could drop “at least 20%, 25%” over the next two to three months if Houthi rebel attacks in the Red Sea on ships not directly related to Israel are ceased, DP World’s deputy chief executive Yuvraj Narayan told Reuters on the sidelines of the World Economic Forum meeting taking place in Davos, Switzerland, January 22.
Ships not linked to Israel could begin returning to the Red Sea in as little as two weeks, Narayan said, adding that as a result freight rates might “come crashing down.”
DP World is the Dubai-owned ports and logistics firm formed in 2005 by the merger of Dubai Ports Authority and Dubai Ports International. The company handles 70 million containers carried by around 70,000 vessels annually, equating to roughly 10% of global container traffic.
Yemen’s Houthi rebels have signaled that they plan to stop attacking ships with links to the U.S. and U.K. after a ceasefire agreement between Israel and Hamas, but it has been uncertain how that announcement would impact shipping. On January 22, they released the 25-member crew of the British-owned Galaxy Leader cargo ship, more than a year after the vessel was seized in the Red Sea.
About 70% of vessel traffic has been sailing thousands of miles around Africa rather than through the Red Sea since the Houthis first began attacking ships in 2023.
