UNCTAD Report: Sharp Decline in Suez Canal Traffic Signals Global Trade Disruptions

The latest report from the United Nations Conference on Trade and Development (UNCTAD) highlights significant disruptions in global trade routes. Over the two-month period starting from December 2023, there has been a notable decline in activity through the Suez Canal. UNCTAD reveals a staggering 39% reduction in cargo ships traversing the canal, coupled with a 45% decrease in cargo tonnage. This dramatic downturn is primarily attributed to the escalating attacks on commercial vessels sailing through the Red Sea by the Houthis, a pro-Iranian militia group based in Yemen. In response to these security concerns, shipping companies have opted to reroute their vessels to safer passages, exacerbating the decline in traffic through the Suez Canal. Notably, container traffic has taken a significant hit, plummeting by a substantial 82% during the same period. Furthermore, the global trade landscape has been further disrupted by external factors. The recent Russian invasion of Ukraine has disrupted traditional grain and oil transportation routes, while the ongoing drought in the Panama Canal has led to a significant decrease in vessel traffic. These combined challenges, along with the sharp decline in cargo throughput via the Suez Canal, underscore a weakening of the three primary arteries of global trade.