Red Sea Chaos: Impact on Global Economy
31/01/24 17:52 Filed in:
NEWS'No shipping, no shopping':
Trade experts warn Congress what more Houthi Red Sea chaos will mean for the economy.
The world's largest shipping company, MSC, along with retail and trade experts, have warned Congress about the growing chaos in the Red Sea caused by Houthi rebel attacks. Charles "Bud" Darr, executive vice president of MSC, emphasized the need to stop the attacks to protect seafarers and client cargo. Dr. Ian Ralby, CEO of I.R. Consilium, described the Houthis as "merchants of chaos" and highlighted that the crisis in the Red Sea affects not only the U.S. but also U.K. and U.S. vessels. The increase in U.S. military strikes in Yemen has led to a rise in the targeting of U.S. ships, with Iran's involvement being problematic. The discussion also raised concerns about prioritizing security for U.S. flagged ships over foreign vessels. The attacks on global shipping have led to vessel diversions, delays in the global supply chain, and increased air freight usage. Major companies like Suzuki Motor, Tesla, Volvo, Michelin, Ikea, Next, and Crocs have reported product delays due to these disruptions. National Retail Federation companies are seeing container prices double, leading to cost increases for cargo and potential price hikes for consumers. Approximately 28% of the world's container trade passes through the Suez Canal/Red Sea, affecting furniture, household goods, clothing, and apparel. Rising freight costs and additional surcharges are impacting trade routes, including Europe to the U.S., due to container availability issues. The crisis in the Red Sea is described as a global problem, with the potential to significantly impact consumer prices more than the energy markets.Tags:Egypt I RED SEA
