By Elisa Martinuzzi
DAVOS, Switzerland (Reuters) – Ships not linked to Israel could begin returning to the Red Sea in as little as two weeks, DP World’s deputy chief executive said, adding that could see freight prices “come crashing down”.
Sea freight prices could drop “at least 20%, 25%” and that could happen over two to three months, Yuvraj Narayan told Reuters on the sidelines of the World Economic Forum meeting taking place in Davos, Switzerland.
It is hard to predict a specific timeline, however, the deputy CEO and CFO of the Dubai-owned ports and logistics firm added.
Yemen’s Houthis said on Sunday they will limit their attacks on commercial vessels to Israel-linked ships and will look into halting all attacks once the Gaza ceasefire is fully implemented.
The Iran-backed Houthis have carried out more than 100 attacks on ships since November 2023. They have sunk two vessels, seized another and killed at least four seafarers.
They have staged attacks across the southern Red Sea and the Gulf of Aden and still hold 25 crew members from the Galaxy Leader car carrier seized in November 2023.
In response many of the world’s biggest shipping companies have diverted vessels away from the Red Sea, travelling around the southern tip of Africa instead.
Narayan said that has tied up at least 30% more capacity than usual. He said freight rates are expected to come down once the shorter route via the Red Sea and Suez Canal picks up again.
Dubai’s DP World, which manages ports in countries from Britain to Peru as well as operating warehousing and logistics parks.
Asked about possible expansion, Narayan said DP World is looking at the east and west coasts of Africa.
“I think there’s massive potential there because there’s nothing available …and the cost of moving cargo in Africa is so high that it just makes sense.”
In Europe, the state-owned conglomerate is working on investment in London Gateway port despite a “challenging” economic environment in the UK due to lack of growth and legacy issues, he said.
The $1.3 billion project was reportedly put on hold after two ministers criticised practices at DP World’s subsidiary P&O Ferries, but British business minister Jonathan Reynolds in October said the investment was going ahead after talks with the firm.
With a general increase in the size of vessels “we have the greatest possible location right now,” Narayan said speaking of the project.
“We’re going to do a complete build-up of London Gateway …that was always our strategy.”