Red Sea crisis from Houthi attacks hits world trade as cost of shipping soars by 170%

Attacks by Yemeni Houthi rebels on merchant ships heading for the Suez Canal via the Red Sea are causing one of the biggest disruptions to world trade since the Covid-19 pandemic.

At least 18 shipping lines, including Danish giant Maersk, have already rerouted their vessels around South Africa to avoid passing through the strategic Gulf of Aden, an alternative that makes journeys between Asia and Europe significantly longer and more expensive.

The impact on freight rates has been astronomical: they have almost tripled since the attacks, which the rebel militia claims are aimed at punishing Israel for the war in Gaza, intensified in mid-December. The escalating cost of transport threatens the world economy with a further inflationary setback, although experts are confident that the effect will be limited.

The increase in the cost of transport comes at a delicate time for the global economic situation, marked by uncertainty and the hangover from an inflationary escalation (and its effects) that was beginning to subside.

Freight booking platform calculates that carrying goods in a 40-foot container (12 meters long, 2.3 meters wide and 2.4 meters high) from Asia to northern Europe now costs $4,000, a 173% increase from mid-December, Bloomberg reports. For cargoes from Asia to the Mediterranean, the price rises to $5,175, and some companies are charging as much as $6,000 on routes due to depart in mid-January. From Asia to the U.S., rates are up less, by 55%, to $3,900.


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