The United Nations Conference on Trade and Development (UNCTAD) reported on Thursday that the volume of cargo passing through the Suez Canal has fallen by 45% in two months due to persistent attacks on Red Sea shipping by Iran-backed Yemeni terrorist group Houthis. .
Anctad Said Ships passing through the Suez Canal have fallen by 39 percent thanks to Houthi terror, a major blow to one of the world's most important shipping lanes. This decline further intensified in the new year, with container traffic through the canal dropping by an astonishing 82% in the month to January 19.
This reduction in transportation supply has naturally led to higher prices, but thankfully they have not yet reached the devastating heights of the Wuhan coronavirus pandemic. Shipping costs are rising rapidly even on routes that are not directly connected to the Red Sea or the Suez Canal.
UNCTAD Trade and Logistics Director Jan Hoffmann said at a press conference on Thursday that rising transportation costs could soon be reflected in changes in food prices for consumers, further exacerbating the food crisis in developing countries. Ta. He predicted that inflation in other products would start accelerating in the second half of 2024 if the Red Sea crisis remained unresolved.
Hoffman said the Houthi attacks, combined with the disruption caused by Russia's invasion of Ukraine and the drought in Panama that is slowing traffic through the Panama Canal, pose a formidable triple threat to global commerce.
Houthi fighters. Capture the Galaxy Leader Cargo in the Red Sea on November 20, 2023. (Houthi movement, via Getty Images)
“We're very concerned. We're seeing delays, higher costs and increased greenhouse gas emissions,” he said, adding that the ship would avoid the Suez Canal and take the much longer route around Africa. I was referring to the fuel burned by ships.
of new york times I got it. The longer alternative route around Africa is more than just an inconvenience that will increase prices, as it will add two weeks to the voyage and make shipping containers unavailable to other customers, it was announced Thursday.
The supply of shipping containers is limited, but the size of containers has increased significantly after the disruption caused by the coronavirus pandemic, so a longer Cape of Good Hope route could cause a global container shortage. be. This was revealed by industry analysts. times that Container prices are currently skyrocketing because additional containers manufactured after the pandemic are sitting in the “wrong places.”
The shipping industry is also dealing with significant increases in insurance premiums, as insurance companies now require all ships passing through the Red Sea to purchase “war risk” cover. These costs will inevitably be passed on to consumers and, as UNCTAD has pointed out, every humanitarian emergency on earth will be further burdened by poor and crisis-hit countries that cannot afford to bear them. It is likely to get worse.
Another area to watch is energy prices, which have remained stable so far thanks to weak consumer demand and high inventories. Oil and liquid natural gas (LNG) tankers have begun to avoid the Red Sea, even those from Qatar, a staunch ally of the Houthi Hamas group. Usually viewed favorably.
of times He said LNG exports from the United States were keeping European energy prices down.
President Joe Biden is freezing Approval for LNG products was given on Friday in an SOP to radical environmentalists.
of loss It is clear that around 40% of the Suez Canal's revenues are a problem for Egypt, whose economy was in crisis even before the Red Sea route began to be closed.Reuters poll On Wednesday, a percentage of economists expected Egypt's gross domestic product (GDP) growth to slow by nearly 0.5 percentage point over the next two years, after slowing completely at the end of 2023. Egypt's inflation rate has been at a record high since June, reaching 33.7%. During December.
Egypt probably It is politically difficult for President Abdel Fattah el-Sissi to criticize the Houthis, who have suffered more losses than any other country from the Red Sea crisis but are ostensibly acting on behalf of the Palestinian people. The reaction is modest.
