Air Freight Rates Rise Amid Red Sea Crisis

An employee checks freight at a ramp of Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing Rights
An employee checks freight at a ramp of Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing Rights
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Air Freight Rates Rise Amid Red Sea Crisis

An employee checks freight at a ramp of Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing Rights
An employee checks freight at a ramp of Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing Rights

Global air freight rates have climbed for the first time in seven weeks as attacks on Red Sea shipping prompt companies to secure costlier air cargo space.

The Baltic Air Freight Index, which shows general cargo weekly transactional rates across a number of routes, rose 6.4% in the week to Monday, price reporting agency TAC Index said, reversing declines since a mid-December seasonal peak.

Attacks by Yemen's Iran-aligned Houthi group on vessels in the Red Sea, launched to express solidarity with Palestinians in Gaza, have forced shippers to take longer routes that can add weeks to delivery times, Reuters reported.

"The increase is in line with expectations that rates may spike following disruption to ocean shipping in the Red Sea, though sources also point out that rates often rise in the run-up to Chinese New Year," TAC Index said.

Many factories in China close for the 8-day holiday which begins this year on Feb. 10 and companies push to get stock out to customers ahead of this.

Air freight rates out of Shanghai rose 8.8% week on week on Monday, led by big increases to Europe. Rates out of Hong Kong gained 5.9% and rates out of Southeast Asia jumped 10%.

The Red Sea, which leads to the Suez canal, lies on the key east-west trade route from Asia's manufacturing hubs to Europe and then on to the east coast of the Americas.

In recent weeks freight companies have been securing more air cargo space and some customers have begun shipping goods wholly or partially by air to avoid delays.

However air freight prices had remained relatively stable as the shipping crisis coincided with a post-Christmas lull in demand.



Saudi Arabia: Global Mining Needs $6 Trillion in Investments to Meet Demand

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
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Saudi Arabia: Global Mining Needs $6 Trillion in Investments to Meet Demand

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)

The global mining industry requires $6 trillion in investments over the next decade to meet rising demand, presenting a major challenge for the sector. This figure was revealed by Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef during an international meeting of mining ministers.

The announcement underscores the mining sector’s appetite for investments, coinciding with Saudi Arabia’s increasing focus on making mining the third pillar of its national industrial strategy.

The meeting was part of the Future Minerals Forum hosted by Saudi Arabia under the theme “Creating Impact,” which gathered representatives from nearly 90 countries and over 50 organizations. The conference highlighted the vital role of mining in Saudi Arabia and the global economy.

Key topics discussed included boosting value addition in mineral-producing countries and developing green metals using advanced technologies and renewable energy.

The ministerial meeting facilitated the signing of several memorandums of understanding aimed at strengthening international partnerships and advancing Saudi Arabia’s mining and minerals sector.

In 2022, Saudi Arabia increased its estimated untapped mineral wealth from $1.3 trillion to $2.5 trillion, a move intended to support the Kingdom’s efforts to diversify its economy.

Global mining investments

In his opening remarks, Al-Khorayef stated that the global mining industry would need investments of $6 trillion over the next decade to meet growing demand, particularly driven by the global energy transition. He emphasized that metals are the foundation of supply chains and are essential for meeting the increasing demand for critical materials.

The minister also stressed the importance of continuing three initiatives launched at last year’s conference, namely, the International Framework for Critical Minerals, a network of centers of excellence to build mining expertise in the Middle East, and a priority-based approach to supply chain development.

He proposed forming a ministerial-level steering committee to oversee these initiatives and called on multilateral organizations to develop a roadmap to mitigate investment risks and enhance collaboration.

In remarks to Asharq Al-Awsat on the sidelines of the conference, Al-Khorayef said that Saudi Arabia is working closely with Arab countries, particularly those with established mining sectors like Morocco, Jordan and Egypt.

The minister highlighted the need for regional integration in mining, as companies often operate across multiple areas, stressing that mining is a key component of Saudi Vision 2030, particularly as the world shifts toward sustainable energy solutions and technologies that require large quantities of minerals.

Yonis Ali Guedi, Djibouti’s Minister of Energy and Natural Resources told Asharq Al-Awsat that his country had signed a new cooperation agreement with Saudi Arabia to enhance collaboration in the mining sector and exchange training expertise. The agreement also includes resource-sharing and highlights Djibouti’s need for Saudi investments, he added.

The minister underlined the significant role Saudi companies could play in developing Djibouti’s mining sector, while also acknowledging progress in local industries. On a broader level, Guedi pointed to the growth of Africa’s mining sector and underscored the importance of maintaining this momentum to meet global demand.

Focus on critical minerals

In comments to Asharq Al-Awsat, Julius Maada Bio, Sierra Leone’s Minister of Mines and Mineral Resources, said that financing remains the greatest challenge for his country’s mining sector.

Exploration of critical minerals, he explained, requires significant investments with high risks, a challenge faced by many African nations. Bio underscored the importance of improving Sierra Leone’s infrastructure and value chain capabilities, from exploration to processing, and expressed interest in leveraging Saudi expertise in mining.

He added that Sierra Leone is seeking to strengthen international cooperation to create a comprehensive framework for critical minerals, with a focus on sustainability.

Malaysia’s Minister of Natural Resources, Environment, and Climate Change Nik Nazmi Nik Ahmad highlighted that the key challenge for his country’s mining sector is its technological gap. He noted that advanced technologies for producing and processing rare earth minerals are concentrated in a few major countries, limiting Malaysia’s competitiveness in global markets.

The minister also pointed to geopolitical tensions disrupting global supply chains, which has complicated matters for countries like Malaysia that rely on trade with both China and the United States.

Despite these challenges, Ahmad stated that his country is working to boost its domestic processing capabilities for rare earth minerals, aiming to reduce its reliance on raw material exports.

Yemeni Minister of Minerals Dr. Saeed Al-Shamasi emphasized Yemen’s valuable mineral resources, including lithium, which is essential for batteries and renewable energy technologies. Yemen also holds reserves of copper and other strategic minerals.

He called for urgent foreign investments to develop the sector, given Yemen’s lack of advanced infrastructure. Al-Shamasi also highlighted Yemen’s efforts to strengthen cooperation with Saudi Arabia, noting the establishment of a Saudi-Yemeni Business Council to facilitate investment across various sectors.

International agreements

During the ministerial meeting, Al-Khorayef signed cooperation agreements with six countries: Djibouti, the United Kingdom, Jordan, Zambia, Austria and France. These agreements aim to strengthen international partnerships and advance the Kingdom’s mining sector.

The accompanying exhibition featured cutting-edge technologies and innovations in mining, promoting global collaboration to achieve sustainability in the sector.

Meanhwile, two global alliances, including local and international companies, won exploration licenses for six mining sites in Saudi Arabia during the seventh round of mining competitions, according to the Ministry’s statement on Tuesday.