Experts Warn Red Sea in Danger
31/01/24 17:17 Filed in: NEWS
Specialists in maritime transport and economic experts are sounding the alarm about an imminent "new shock" to global trade, reminiscent of the disruptions witnessed during the COVID-19 pandemic. This concern arises in the wake of major shipping companies suspending their activities in the Red Sea due to Houthi attacks on commercial vessels in the Bab el-Mandeb strait.
Experts interviewed by BBC indicate that the diversion of ships from the Red Sea route to the longer route via the Cape of Good Hope will result in a cost increase of up to 30% for shipping, insurance, and other maritime logistics services. They also predict a 10% to 15% price hike in Europe and the United States if shipping through the Suez Canal is halted in the coming weeks.
These warnings come following decisions by prominent companies such as British Petroleum (BP), Hong Kong-based Orient Overseas Container Line (OOCL), Dutch-based Maersk, German-based Hapag-Lloyd, French-based CMA CGM, and Italian-Swiss Mediterranean Shipping Company (MSC) to either suspend their activities in the Red Sea via the Suez Canal or redirect their voyages via the longer Cape of Good Hope route. This comes in response to attacks by the Houthi movement against ships it claims are linked to Israel.
The movement has carried out several attacks on commercial vessels near the Bab el-Mandeb, including a Maersk cargo ship headed for Israel, which was hit directly by a drone after reportedly disregarding warnings.
The Suez Canal Authority has stated that it closely monitors the ongoing tensions and assesses their impact on navigation through the canal.
