A dead end for goods in containers going from Asia to Europe and from Asia to Europe. This is what the Red Sea has become in recent months, following attacks by Houthi rebels in response to Israel’s war against Hamas. The greater danger for ships carrying goods translates into longer journeys, higher prices for goods transported, and greater pollution due to the additional amount of fuel required to travel on alternative routes. Several international shipping companies have decided to suspend shipments along one of the world’s most important trade routes. Italy is also paying the damages of this chaos, and an important Italian company has closed its doors in the past months due to the danger of opening to the Red Sea. This is the Italian company Kalypso. Founded just over two years ago, the company closed its doors just before Christmas. Kalypso’s problems according to the private portal ShippingItaly They had started much earlier due to debts accumulated after the post-pandemic drop in shipping rates, but the instability caused by Houthi attacks in the Red Sea was the final blow that sank the shipping company.
Container ships are now being diverted to the Cape of Good Hope at the southern tip of Africa. The result: approximately 6 thousand kilometers added to the journey and an increase in costs. It is feared that a new inflationary shock will occur for the world after the shock caused by the pandemic and the war in Ukraine.
Houthis attacked container ships
Since January the situation has become unsustainable. Pro-Iran Yemeni armed groups have recently intensified their attacks on the Bab-el-Mandeb Strait, located between the Arabian Peninsula and the Horn of Africa. The 30 km wide Bab-el-Mandeb Strait crosses the coasts of Djibouti and Yemen, through which ships pass and eventually reach the Mediterranean via the Suez Canal. About 12 percent of world trade passes through here, and the route is also vital for oil shipments from the Persian Gulf to Europe and North America. Dutch bank ING calculated that the detour around the Cape of Good Hope adds 3,000 to 3,500 nautical miles (about 6,000 km) to journeys connecting Asia to Europe (or vice versa). Travel according to agency calculations Reuters So it takes 10 to 14 days longer, which means an additional cost of about $1 million for fuel for each round trip between the two continents. Added to this are the increasing insurance costs required to guarantee shipments. Currently, the most security-sensitive oil tankers are systematically diverted, while container shipments of consumer goods, raw materials, clothing and food are frequently delayed.
There are fears that rising costs will soon be passed on to consumers, as happened in 2021 when the Suez Canal remained inaccessible for a week after the Ever Given container ship ran aground there. Consumers: Now delays related to the situation in the Red Sea may once again cause prices to rise.
Source: Today IT
Karen Clayton is a seasoned journalist and author at The Nation Update, with a focus on world news and current events. She has a background in international relations, which gives her a deep understanding of the political, economic and social factors that shape the global landscape. She writes about a wide range of topics, including conflicts, political upheavals, and economic trends, as well as humanitarian crisis and human rights issues.
