Captain James Staples, a lecturer at the Maritime College who has personally dealt with pirates, sheds light on the Houthi attack in the Red Sea in “Kuraman Countdown.''
The attacks by Iran-backed Houthi rebels on commercial ships in the Red Sea, a key crossroads for global trade, have disrupted supply chains just as the global economy begins to recover from high inflation, chronic shortages and bottlenecks. There is a risk that the crisis will reignite.
Eight weeks after first attack by Yemeni rebels, shipping costs are already on the rise Began targeting ships in transit. It passes through the Red Sea and the Suez Canal.
Approximately 15% of the world's shipping volume passes through the Suez Canal, including 30% of the world's container trade. But to avoid attack and theft of their cargo, many ships instead sail around the Cape of Good Hope, a long journey around the African continent.
“This has resulted in significant costs and delays for shipping from the Middle East, Europe and other parts of the region that rely heavily on the Suez Canal,” Professor Robert Handfield said. Ta. North Carolina State University's director of operations and supply chain management told FOX Business.
A cargo ship crosses the Suez Canal, one of the most important man-made waterways, in Ismailia, Egypt, on December 29, 2023. (Photo by Fareed Kotb/Anadolu, Getty Images/Getty Images)
Osama Rabie, head of the Suez Canal Authority, said ship traffic from January 1 to January 11 was down about 30% compared to the same period a year ago. The number of ships that have passed through the canal this year so far has fallen to 544 vessels, a significant decrease from the 777 vessels recorded during the same period in 2023.
Container shipping giant Maersk suspended use of the Red Sea and Suez Canal earlier this year after one of its ships was attacked by Houthi militants. The company said it would divert all ships around Africa for the “foreseeable future” and warned of a “significant” impact on global growth as a result of the disruption.
Houthis vow to continue attacking ships in Red Sea despite formation of US-led force
UBS estimates that ships circumnavigating Africa will add about two-and-a-half weeks to their journeys and reduce effective capacity for travel between Asia and Europe by about 25%.
As a result, shipping charges have increased. According to , the cost of transporting goods from Asia to Northern Europe has increased by 173% compared to before vessel diversion began in the region. Freight terminal data. The carrier also announced additional charges ranging from $500 up to $2,700 per container.
Drought-like conditions in the Panama Canal are exacerbating the pain of attacks in the Red Sea. Handfield said extremely low water levels have limited the number of ships passing through the Panama Canal, further boosting global shipping.
Rising transport costs and possible disruption to global trade routes are raising concerns about a resurgence in inflation, just as price pressures within the economy are finally starting to ease. crude oil price There was a spike on Friday, a day after the United States and Britain led the military response to the attack.
The sun is seen behind a crude oil pumpjack in the Permian Basin in Loving County, Texas, on November 22, 2019. (Reuters/Angus Mordaunt//File Photo/Reuters Photo)
Analysts at Bank of America warned in a note this week that disruptions in the Red Sea and Suez canals, as well as the Panama Canal, risk delaying the recent decline in inflation.
“Higher shipping costs due to Red Sea issues and lower Panama Canal water levels may also dampen the potential for further declines,” they wrote.
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Still, Handfield said certain categories of goods and services, such as rare earth minerals, chemicals, and some products from the region, such as certain types of grains, may see “some price increases.” , said the impact on U.S. consumers remains minimal.
“There is no indication that there will be a major impact.” [on prices] “Not yet, at least not in the United States. It could very well impact more countries, including Europe,” Handfield said.
