The wind and waves of the Red Sea are causing ripples on the global logistics stage. Continued Houthi attacks in the region have led to a staggering 42 percent drop in traffic to the Suez Canal over the past two months. This is not just a number, but a huge impact on the world.
The United Nations** and the Development Conference warn that the Red Sea crisis is complicating the logistics chain. Many shipping companies choose to avoid risks by detouring to the Cape of Good Hope at the southern tip of Africa, which not only increases the transit time, but also pushes up the cost of transporting goods.
Egypt's Suez Canal carries about 12% of the world's cargo and is the world's leading artery. The attack led to the diversion of many container and tanker vessels, resulting in 67% of the number of container ships passing through the canal each week**. This is undoubtedly a heavy blow to the ** chain.
This crisis has not only led to a surge in container freight rates, but also caused a surge in container freight ratesIn the last week of December, container spot rates were up to more than $500 in a week, the largest weekly increase ever. Last week, spot shipping rates for containers departing from Shanghai were 122% higher** than at the beginning of December last week, with 256% of freight rates from Shanghai to Europe**. Tensions in the Middle East have boosted market concerns about **, and oil prices are once again in the spotlight.
Not only that, but disruptions in grain shipments from Europe, Russia, and Ukraine are pushing up global food**, posing a potential risk to global food security. This crisis has transcended the regional scope and has become a link in the global economic landscape that cannot be ignored.
Although the impact of shipping costs will not be felt immediately by consumers, the impact of the United Nations and the Development Conference will be felt gradually over the course of a year. Longer transport distances, rising costs, and a surge in greenhouse gas emissions from the shipping industry will all become new variables for the global economy.
This is a storm in the Red Sea, and we need to keep an eye on the aftermath and think about how to keep the economy stable in this unpredictable environment.