By Elisa Martinuzzi

DAVOS, Switzerland (Reuters)

Ships not linked to Israel could begin returning to the Red Sea in as little as two weeks, said DP World’s deputy chief executive, Yuvraj Narayan. This could lead to a significant drop in freight prices, estimated at “at least 20%, 25%” within two to three months.

While the timeline remains uncertain, Narayan provided insights on the recent geopolitical developments affecting maritime trade. Yemen’s Houthis announced on Sunday they would limit attacks to Israel-linked vessels and consider halting all attacks once a ceasefire in Gaza is fully implemented.

Since November 2023, the Iran-backed Houthis have executed over 100 attacks on ships, resulting in two sunk vessels, one seizure, and at least four casualties. They continue to hold 25 crew members from the Galaxy Leader car carrier, seized in November.

In response, many major shipping companies have rerouted vessels away from the Red Sea, opting for the longer journey around Africa’s southern tip, which has increased capacity use by at least 30%. Narayan anticipates a decline in freight rates once the more direct route through the Red Sea and Suez Canal is resumed.

DP World, a Dubai-owned company, manages ports globally and is exploring possible expansion opportunities on the east and west coasts of Africa due to their perceived high potential and the high costs of cargo movement in the region.

In Europe, DP World is continuing investment efforts at London Gateway port despite challenging economic conditions in the UK. After some setbacks, British business minister Jonathan Reynolds confirmed in October that the previously halted $1.3 billion project is back on track. Narayan emphasized that the company remains committed to enhancing the London Gateway’s capabilities with a complete build-up plan as part of their strategy.