The ongoing geopolitical instability worldwide has significantly impacted the global trade market, indirectly reflecting on the Middle Corridor passing through Georgia. The primary reason is the continuous attacks on commercial fleets by Yemen’s Houthi rebels in the Red Sea, forcing shipowners to seek alternative shipping routes. Previously, the route from Shanghai to Rotterdam via the Red Sea was 18,250 km long, whereas the alternative route around Africa, via the Cape of Good Hope, extends to 25,000 km, increasing transit time by approximately 8–10 days.
Due to the ongoing conflict, container shipping costs from China to Europe have surged dramatically. In May 2024, freight rates skyrocketed from $3,200 per TEU, peaking at $8,500 per TEU in August. Later, prices declined, and as of today, they fluctuate between $4,500 and $5,000 per TEU.
Despite the reduction in tariffs, major cargo owners and shipowners remain reluctant to revert to the original route, leading to a significant shift of shipments to alternative corridors, including the Middle Corridor. As a result, in 2024, the volume of cargo transported via the Middle Corridor reached 4.6 million tons—a 68% increase compared to the previous year.
Consequently, the global conflicts in the Red Sea could be a contributing factor to the activation and increasing use of the Middle Corridor.
