A Houthi military helicopter flies over a ship in the Red Sea

Global supply chains are facing severe disruption as a result of the world’s biggest shipping companies diverting journeys away from the Red Sea.

Attacks by Houthi rebels in Yemen on commercial vessels have resulted in many firms deciding to avoid one of the world’s busiest shipping lanes.

The Houthi group has declared its support for Hamas and has said it is targeting ships travelling to Israel, though it is not clear if all the ships that have been attacked were actually heading to Israel.

US and UK naval forces in the Red Sea have now launched air strikes against Houthi rebel targets in Yemen in response to the attacks on shipping.

What has happened?

The Houthis have been stepping up their attacks since the start of the Israel-Hamas war in October.

The group, which is backed by Iran, has been using drones and rockets against foreign-owned vessels transporting goods through the strait of Bab al-Mandab – a 20-mile wide channel that splits Eritrea and Djibouti on the African side and Yemen on the Arabian Peninsula.

Ships usually take this route from the south to reach Egypt’s Suez Canal further north.

But because of the attacks and the threat of future assaults, several of the world’s largest shipping firms, including Mediterranean Shipping Company and Maersk, have diverted vessels away to a much longer route around Africa’s Cape of Good Hope and then up the west side of the continent.

Chart showing various shipping routes

BP has also paused all shipments of oil through the Red Sea, blaming the “deteriorating security situation”.

The longer journeys add at least 10 days to shipping times and cost companies millions of dollars.

Why is this shipping route so important?

Any ship passing through the Suez Canal to or from the Indian Ocean has to come via the strait of Bab al-Mandab and the Red Sea.

The Suez Canal is the quickest sea route between Asia and Europe and is particularly important in the transportation of oil and liquefied natural gas (LNG).

About nine million barrels of oil per day were shipped through the Suez Canal in the first half of 2023, according to freight analytics firm Vortexa.

Information graphic for Suez Canal

Analysts at S&P Global Market Intelligence said nearly 15% of goods imported into Europe, the Middle East and North Africa were shipped from Asia and the Gulf by sea. That includes 21.5% of refined oil and more than 13% of crude oil.

But it is not just about oil. Container ships carry all sorts of consumer goods seen in the shops including TVs, clothes, trainers and sports equipment.

What is the impact on consumers?

It is inevitable that supply chains will be affected due to ships being diverted away from the Red Sea, but consumer goods “will face the largest impact”, according to Chris Rogers, head of supply chain research at S&P Global Market Intelligence, though he does note the current disruption has occurred “during the off-peak shipping season”.

Delays to products reaching shops can be expected, due to the Cape of Good Hope route adding about 3,500 nautical miles.

Furniture giant Ikea and UK retailer Next have both warned that supplies of products could be delayed if disruption to shipping continues.

Tesla has suspended manufacturing at its only European electric car factory due to supplies being disrupted.

The extra distance will also cost companies more. According to supply chain advisers Drewry, the price of using a 40ft container has risen by 15% in the past week. These extra costs could be passed on by businesses to customers.

However, container rates are still far below the levels seen in 2021, when freight charges soared in line with demand as Covid restrictions were eased.

There are also fears the disruption could push up oil prices.

A rise in oil prices, a key ingredient in car fuel, can lead to higher prices at the pumps and also drive higher inflation. Inflation, which measures the pace of price rises, has been falling in the UK and is currently 3.9%.

When it comes to shipments of Liquid Natural Gas (LNG) being disrupted, even if wholesale energy prices rise, any increases would not feed through to domestic bills until April 2024 at the earliest.

This is because the energy price cap, which limits the amount suppliers can charge, has already been set for January.

Is moving freight by sea the only option? Mr Rogers says transporting goods by rail instead would require “crossing Russia”, which is under economic sanctions due to invading Ukraine, while “trucking from the Gulf to Israel may only offset around 3% of shipping”.

What is being done in response?

The US had launched an international naval operation in December to try to protect ships on the Red Sea route.

This operation was joined by countries including the UK, Canada, France, Bahrain, Norway and Spain, but some shipping companies remained reluctant to start using the route again.

Maersk resumed shipments through the Red Sea briefly following the introduction of the security operation, but paused sailings again after one of its container ships came under attack.

US and UK naval forces in the Red Sea have now launched air strikes against Houthi rebel targets across Yemen.

“These targeted strikes are a clear message that the United States and our partners will not tolerate attacks on our personnel or allow hostile actors to imperil freedom of navigation,” US President Joe Biden said.

Source

44 comments
  1. Excellent site. A lot of useful info here. I?¦m sending it to several pals ans also sharing in delicious. And obviously, thanks for your effort!

  2. I carry on listening to the news speak about receiving free online grant applications so I have been looking around for the top site to get one. Could you tell me please, where could i get some?

  3. I’m truly enjoying the design and layout of your website. It’s a very easy on the eyes which makes it much more enjoyable for me to come here and visit more often. Did you hire out a designer to create your theme? Exceptional work!

  4. I was very pleased to find this web-site.I wanted to thanks for your time for this wonderful read!! I definitely enjoying every little bit of it and I have you bookmarked to check out new stuff you blog post.

  5. I precisely had to appreciate you yet again. I’m not certain what I might have done without the actual recommendations shown by you concerning such topic. Entirely was a real scary matter in my view, nevertheless taking a look at a specialised style you treated the issue forced me to weep over delight. I am grateful for this guidance and thus hope you know what an amazing job you happen to be getting into teaching other individuals all through your website. I know that you’ve never met any of us.

  6. Pretty section of content. I just stumbled upon your website and in accession capital to assert that I acquire in fact enjoyed account your blog posts. Anyway I’ll be subscribing to your augment and even I achievement you access consistently quickly.

  7. Thanks for sharing excellent informations. Your web site is very cool. I’m impressed by the details that you have on this website. It reveals how nicely you perceive this subject. Bookmarked this website page, will come back for extra articles. You, my friend, ROCK! I found simply the information I already searched everywhere and just couldn’t come across. What an ideal web site.

  8. The subsequent time I learn a weblog, I hope that it doesnt disappoint me as much as this one. I mean, I do know it was my option to learn, but I actually thought youd have one thing interesting to say. All I hear is a bunch of whining about something that you can repair for those who werent too busy in search of attention.

  9. What Is FitSpresso? The effective weight management formula FitSpresso is designed to inherently support weight loss. It is made using a synergistic blend of ingredients chosen especially for their metabolism-boosting and fat-burning features.

  10. What Is LeanBiome? LeanBiome is a natural weight loss supplement that reverses bacterial imbalance in your gut microbiome with the help of nine science-backed lean bacteria species with Greenselect Phytosome, a caffeine-free green tea extract crafted with patented phytosome technology.

  11. Thanks so much for giving everyone an extraordinarily terrific opportunity to read critical reviews from this web site. It can be so brilliant and packed with amusement for me and my office peers to visit your website not less than thrice a week to see the fresh tips you have got. And definitely, I’m so certainly satisfied for the mind-boggling concepts you serve. Some 2 tips in this post are indeed the most suitable we have all had.

  12. What Is Java Burn? Java Burn is a natural health supplement that is formulated using clinically backed ingredients that promote healthy weight loss.

  13. obviously like your web site but you have to test the spelling on several of your posts. Many of them are rife with spelling issues and I to find it very bothersome to inform the reality however I will surely come again again.

  14. I loved as much as you’ll receive carried out right here. The sketch is tasteful, your authored subject matter stylish. nonetheless, you command get bought an shakiness over that you wish be delivering the following. unwell unquestionably come more formerly again as exactly the same nearly a lot often inside case you shield this hike.

  15. This is the right blog for anyone who wants to find out about this topic. You realize so much its almost hard to argue with you (not that I actually would want…HaHa). You definitely put a new spin on a topic thats been written about for years. Great stuff, just great!

  16. What’s Happening i’m new to this, I stumbled upon this I have found It positively helpful and it has helped me out loads. I hope to contribute & assist other users like its aided me. Great job.

  17. Wonderful goods from you, man. I have understand your stuff previous to and you are just extremely excellent. I really like what you’ve acquired here, really like what you’re stating and the way in which you say it. You make it entertaining and you still care for to keep it smart. I can not wait to read much more from you. This is really a great website.

  18. you are really a good webmaster. The website loading speed is amazing. It seems that you’re doing any unique trick. Furthermore, The contents are masterwork. you have done a magnificent job on this topic!

  19. Thank you, I’ve just been looking for information about this topic for ages and yours is the best I have discovered till now. But, what about the bottom line? Are you sure about the source?

  20. Howdy! Do you know if they make any plugins to help with SEO? I’m trying to get my blog to rank for some targeted keywords but I’m not seeing very good success. If you know of any please share. Appreciate it!

  21. hey there and thanks in your information – I’ve certainly picked up something new from proper here. I did alternatively expertise some technical issues the usage of this web site, as I skilled to reload the website lots of instances previous to I may just get it to load properly. I have been puzzling over if your web hosting is OK? Now not that I am complaining, but sluggish loading instances times will sometimes impact your placement in google and can damage your high quality ranking if advertising and ***********|advertising|advertising|advertising and *********** with Adwords. Anyway I’m including this RSS to my email and can glance out for a lot extra of your respective interesting content. Make sure you update this once more very soon..

  22. Hi, i read your blog from time to time and i own a similar one and i was just curious if you get a lot of spam remarks? If so how do you reduce it, any plugin or anything you can suggest? I get so much lately it’s driving me insane so any support is very much appreciated.

  23. Today, while I was at work, my cousin stole my iPad and tested to see if it can survive a 40 foot drop, just so she can be a youtube sensation. My iPad is now destroyed and she has 83 views. I know this is completely off topic but I had to share it with someone!

  24. naturally like your web-site but you need to test the spelling on several of your posts. Many of them are rife with spelling problems and I in finding it very troublesome to tell the reality however I will surely come again again.

  25. I really like your blog.. very nice colors & theme. Did you design this website yourself or did you hire someone to do it for you? Plz answer back as I’m looking to design my own blog and would like to find out where u got this from. many thanks

  26. Hey there would you mind letting me know which webhost you’re using? I’ve loaded your blog in 3 completely different web browsers and I must say this blog loads a lot quicker then most. Can you recommend a good internet hosting provider at a fair price? Thanks a lot, I appreciate it!

  27. Wonderful items from you, man. I’ve consider your stuff prior to and you’re just too excellent. I actually like what you have bought right here, certainly like what you are saying and the way by which you say it. You’re making it entertaining and you continue to take care of to stay it smart. I cant wait to learn far more from you. That is actually a tremendous website.

  28. I do agree with all the ideas you have presented in your post. They are very convincing and will definitely work. Still, the posts are very short for newbies. Could you please extend them a bit from next time? Thanks for the post.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Time travel: What if you met your future self?

By Hal Hershfield15th November 2023 Imagining a conversation with “future you” has…

Can AI cut humans out of contract negotiations?

By Sean McManus Technology Reporter “Lawyers are tired. They’re bored a lot…

OpenAI staff demand board resign over Sam Altman sacking

By Chris Vallance, Annabelle Liang & Zoe Kleinman Technology and business reporters…

Nasa astronaut Frank Rubio has just returned from a record-breaking 371 days in space onboard the ISS, but the trip may have altered his muscles, brain and even the bacteria living in his gut.

With a few handshakes, a brief photoshoot and a wave, Nasa astronaut…

Black Women in Cybersecurity Initiative

About this event 1 hour Mobile eTicket Overview The Black Women in…

Xi Jinping arrives in the US as his Chinese Dream sputters

By Tessa Wong Asia Digital Reporter, BBC News When Xi Jinping stepped…

China and Australia: Frenemies who need each other

By Nick Marsh Asia Business Correspondent China and Australia are proof that…

AI: EU agrees landmark deal on regulation of artificial intelligence

European Union officials have reached a provisional deal on the world’s first…