Bloomberg news agency has reported that the insurance cost for Chinese ships traversing through the Red Sea averages to around 0.35% of the ship and cargo’s total value.
This rate is significantly lower compared to what insurance companies generally charge for cargo ships originating from other countries, predominantly those from the West. For these countries, the insurance rate typically falls between 0.5% to 0.75%. Furthermore, ships associated with the USA, Great Britain, and Israel may have to contend with even higher insurance costs.
Such a setup provides Chinese ships with an additional benefit when it comes to transporting cargo between Europe and the Far East. This is primarily because they can deliver cargo much quicker as they do not need to detour around Africa.
It is important to note that the Yemeni Houthis have declared that Chinese and Russian ships are not their intended targets unless they carry Israeli cargo. This statement provides further assurance for Chinese and Russian traders and shipping companies.
In a related development, the Chinese shipping company COSCO has previously announced that it would cease docking at Israeli ports. This decision seems to be in line with the prevailing circumstances and may have been influenced by the need to ensure the security of their vessels and the cargo they carry.