Yemen’s Houthi rebels is launching missiles to attack vessels in the Red Sea against Israel, affecting naval traffic and global maritime trade.
The Red Sea is one of the world’s main trade routes: about 12% of global trade passes through the Red Sea, including 30% of global container traffic. The Suez Canal, an important trading route for energy supplies and consumer goods, from toys to electronics, is closed for business to many shipping companies. That’s because Houthi rebels in Yemen have been attacking ships in response to the Israel-Gaza war.
Houthi attacks on shipping threaten global consequences, as they have rerouted a majority of global trade away from the crucial maritime artery for consumer goods and energy supplies. Some of the largest container shipping companies are sending vessels on longer journeys that bypass the Red Sea to avoid potential hazards, circumnavigating the African Continent. A shift expected to cause delays and rising prices, with inevitable repercussions also for European ports: longer transit times, more fuel spent, potential disruption and delays, as well as the uncertainty of container unloading times. This results in a direct increase in container freight rates. The shipping cost for a 40-foot container from China rose to $5,000 in January 2024, from $1,600 in December 2023, according to Platts.
In response to the growing impact to global trade, the United States and other Countries, including Italy, have created a new force to prevent attacks by Yemen’s Houthi rebels and to protect ships.
