On December 19, 2023, MSC, the world's largest container shipping company, and CMA CGM of France decided to suspend navigation through the Suez Canal, while Denmark's Maersk and Germany's Hapag-Lloyd also announced that they would suspend services. The Houthi attacks have led to constant damage to merchant ships and the world's greatest threat. At the moment, only COSCO Shipping ships from China are still passing through the Suez Canal. Faced with the threat of the Houthis, the United States and Europe are preparing to intervene with troops.
Since the Houthis began attacking container ships in the Red Sea a month ago, the route to the Suez Canal has become one of the most dangerous routes in the world. In view of the frequent attacks, the Swiss company MSC said it would stop crossing the Red Sea in order to protect the lives and safety of its crew. Denmark's Maersk and Germany's Hapag-Lloyd have also announced the cessation of container shipments through the Red Sea. At present, only China's COSCO Shipping is still operating, which may be related to China's diplomatic efforts.
Houthi attacks threaten the global flow of goods and raw materials. The Red Sea and the Suez Canal are important passages for the world, with about 12% of the world passing through them. Every day, about 500 container ships pass through the Bab el-Mandeb Strait in southern Yemen, which is only about 30 kilometers wide and has become the artery of globalization. If most ships are targeted by the Houthis, the cost of transportation between Asia and Europe will inevitably rise. The increased risk of war on ships has led to insurance costs** and may require more funds for safety precautions, which are reflected in transportation**.
The escalation of the situation in the Red Sea has had wide-ranging global repercussions, not only for commodities such as automobiles, but also for food products such as palm oil, cereals, and other industrial products. Some ships linked to Israel have opted for longer routes around Africa and the Cape of Good Hope. This will lead to extended voyages, increased costs and delivery delays. An increase in insurance costs is also inevitable, and the cost of insurance for ships sailing in the Red Sea has doubled.
Faced with tensions in the Red Sea, Western countries are preparing to intervene with troops. The Houthis are less likely to block the Red Sea, because they don't have a real ** to put up a barrier. And warships from the United States, France and other countries have been patrolling the area to keep the shipping lanes open. However, tensions are growing in Western countries, which are cooperating with the United States and preparing to intervene.
The increase in shipping costs may not be noticeably felt by consumers for the foreseeable future. Although the shipping cost is ***, the cost of shipping between Asia and Europe only accounts for about 2% of the value of the goods, and it will not have a serious impact on the customer. However, tensions in Western countries continue to rise due to the increase in alternative routes and protective measures.