Over a hundred container ships deviated from the Suez Canal to evade Houthi assaults.


The diversion of over a hundred container ships from the Suez Canal through southern Africa serves as an indication of the disruption to international commerce that the Houthi rebels’ assaults on vessels off the western coast of Yemen have caused.

Over a hundred container ships deviated from the Suez Canal to evade Houthi assaults. Kuehne and Nagel, a maritime company, reported identifying 103 vessels that had already altered course, with more anticipated to circumnavigate the Cape of Good Hope in South Africa.

The diversion extends the average voyage from Asia to Europe by approximately 6,000 nautical miles, which could result in an additional three to four weeks for the delivery of products.

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Houthi militants, in an alliance with Iran, have claimed that their attacks on ships were a retaliatory measure against the Israeli bombardment of Gaza. Israel is retaliating against an assault by the Gaza-controlling organization Hamas. The United States announced on Tuesday that it would attempt to lead a naval coalition in the Suez Canal to safeguard shipping.

An estimated 19,000 vessels traverse the Suez Canal annually, making it a pivotal global passageway for transporting fossil fuels and commodities between Asia and Europe.

Thus far, the diverted vessels could transport containers measuring 1.3 meters by 20 feet (6 meters), according to Kuehne and Nagel. Additionally, petrol and oil tankers have been delayed, with BP being the most prominent company publicly admitting this. Shell, its competitor, declined to comment.

In part, the disruption has caused an increase in crude prices. The price of Brent crude oil futures, which serves as the international standard, increased by 1.2% to surpass $80 on Wednesday after falling below $74 one week prior. Additional price increases may ultimately percolate to consumer energy tariffs, contributing to inflation.

Michael Aldwell, a board member for sea logistics at Kuehne and Nagel, stated, “It is anticipated that the increased time spent at sea will consume 20% of the worldwide fleet capacity, which could result in possible disruptions to the accessibility of shipping resources.” Additionally, the potential for delays in the return of unused equipment to Asia could present obstacles, thereby exacerbating the overall disruption of supply chain dependability.

Several major automakers and other businesses from around the globe are monitoring the situation to determine whether or not their supply chains may be impacted. The last significant unanticipated closure of the Suez Canal occurred in March 2021, during which the Ever Given container ship obstructed passage for six days.

The most recent disruption will not impact the retail sector during the upcoming Christmas season, as products are already in stores or warehouses in the United Kingdom, where stocks are created weeks or months in advance.

Although few have reported any effects thus far, an extended disruption to standard shipping patterns could eventually lead to shortages of products for consumers or components for manufacturers.

The disruption occurred concurrently when numerous factories temporarily ceased operations during Christmas, providing companies an extended period to procure essential supplies.

Certain manufacturers had already transitioned from “just-in-time” supply chains, predicated on the timely arrival of products, to a “just-in-case” model, which was less efficient but more resilient, by maintaining more significant emergency stockpiles of components.