Bloomberg: the crisis in cargo transportation due to the danger in the Red Sea has become the largest since the covid
The cost of shipping a container from China to the Mediterranean has more than quadrupled
The passage of ships through the Suez Canal has fallen by 37% after Houthi attacks made the Red Sea unsafe, according to the IMF's PortWatch project. The ships are going around Africa – near the Cape of Good Hope, the traffic has become about the same (33%).
Source. Bloomberg writes about a serious shock to world trade and international supply chains.
About 12% of all maritime commodity flows and up to 30% of containerized cargo pass through the Suez Canal. Oil and oil products, LNG, and consumer goods are transported from India, China, and the Middle East to Europe through the Red Sea. Grain, and in the last year, Russian oil, is also transported in the opposite direction.
The Red Sea accounts for 8% of the world's grain trade, 12% of oil, and 8% of LNG.
Those carriers who dare to pass through ask for double the price for transportation.
The cost of shipping a container from China to the Mediterranean has more than quadrupled since the end of November, according to Freightos, a logistics platform.
"We haven't seen such a rapid increase in costs since the last crisis in the pandemic," admits Vincent Iacopella, a logistics expert at Alba Wheels Up.
Different companies have been affected. Automakers Volvo Car AB and Tesla Inc. have announced that they will suspend the operation of factories in Europe because they cannot receive components from suppliers in Asia.
Nike, Adidas, and Capri Holdings are also at risk because they depend on Asian suppliers. It is unlikely that they will be able to pass on the rising costs to consumers.
Maersk, the world's second largest container carrier, warned last week that the disruptions will last at least several months.
Qatar, one of the largest LNG exporters, has announced that it is pushing back the timing of deliveries to Europe, Bloomberg sources say.
The bottlenecks in global trade could affect inflation, European Central Bank President Christine Lagarde is concerned. And the longer the Red Sea crisis lasts, the more serious the consequences will be, she said.
Background. As reported, the United States is developing plans for a long military campaign against the Yemeni Houthis.
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