Title: Houthi Rebels’ Attacks on Ships Divert More than 100 Container Ships from Suez Canal
Jala News – In response to Houthi rebels targeting vessels off Yemen’s western coast, over 100 container ships have been rerouted from the Suez Canal, causing significant disruption in global shipping routes. Kuehne and Nagel, a prominent shipping company, has reported the diversion of 103 ships, with more expected to opt for the longer journey around South Africa’s Cape of Good Hope.
The decision to reroute these ships adds approximately 6,000 nautical miles to their typical journey from Asia to Europe. As a result, product delivery times are expected to be delayed by three to four weeks. Moreover, this detour places additional strain on already stretched supply chains.
The Houthi rebels’ attacks were a response to Israel’s bombardment of Gaza, with Israel retaliating against Hamas, who exercises control over the region. In light of the escalating situation, the United States has announced its intention to lead a naval coalition to protect shipping in the Suez Canal.
The Suez Canal is a crucial pathway for approximately 19,000 ships each year, serving as a conduit for fossil fuels and goods between Asia and Europe. Consequently, the current diversion is impacting the movement of enormous cargo, as the ships that have already altered their course are capable of carrying 1.3 million 20ft containers.
Not only have container ships shifted their routes, but oil and gas tankers have also been forced to divert. Industry giant BP publicly stated its decision to reroute its tankers. The disruption has led to an increase in oil prices, with Brent crude oil futures rising by 1.2% to over $80 per barrel.
Furthermore, the extended time spent at sea is projected to consume 20% of the global fleet capacity, potentially resulting in significant delays in shipping resources. Returning empty equipment to Asia is expected to face challenges, impacting the overall reliability of supply chains.
Various companies, including major car manufacturers, are closely monitoring the situation to assess potential impacts on their supply chains. While the disruption is not anticipated to affect the retail industry’s Christmas stocks, as they are typically built up in advance, an extended disturbance in shipping patterns could ultimately lead to shortages of products for consumers or vital parts for manufacturers.
Faced with the uncertainties surrounding the global supply chain, some manufacturers have already responded by adopting a “just-in-case” model. This approach entails maintaining emergency stockpiles of parts to mitigate potential interruptions in the supply chain.
This incident marks another major disruption to the Suez Canal following the six-day closure caused by the Ever Given container ship in March 2021. Continued disturbances in shipping patterns could have far-reaching consequences and disrupt the smooth flow of global trade.