The disruption to container shipping traffic in the Red Sea is expected to reduce the industry’s capacity between the Far East and Europe by 15-20% in the second quarter.
India’s navy evacuated all 20 crew members from the vessel True Confidence in the Red Sea after a Houthi missile attack, which resulted in the death of three seafarers and severe injuries to two others. The attack occurred approximately 50 nautical miles off Aden, setting the ship ablaze. The deceased included two Filipinos and one Vietnamese. The crew and three armed guards were taken to a hospital in Djibouti. The vessel, flagged by Barbados and operated by a Greek company, is now drifting and arrangements for its salvage are being made. The Houthis have been attacking vessels in the Red Sea since November, citing solidarity with Palestinians. The cost of insuring voyages through the Red Sea has significantly increased since these attacks began. The International Transport Workers’ Federation has called for better protection for seafarers and suggested diverting ships around the Cape of Good Hope until safe transit through the Red Sea can be guaranteed. The True Confidence was transporting steel products and trucks from China to Jeddah and Aqaba.
The International Monetary Fund (IMF) has upgraded its forecast for global economic growth, citing faster-than-expected easing of inflation. The IMF’s chief economist, Pierre-Olivier Gourinchas, stated that a “soft landing” was in sight, but overall growth and global trade still remained lower than the historical average. The IMF forecast global growth of 3.1% in 2024, up from its previous forecast of 2.9%, and expected global trade to expand by 3.3% in 2024. However, risks such as geopolitical tensions in the Middle East and attacks in the Red Sea could disrupt commodity prices and supply chains. The IMF also warned that delays in fiscal consolidation and the potential violation of global trade rules by certain countries could impact economic activity.