Red Sea attacks deliver new shock to global trade, but will it get worse?

from Daily Sabah

Car factories in Belgium and Germany have come to a standstill. A renowned British department store faces delays in launching its spring fashion lines. A Maryland-based company producing hospital supplies is grappling with uncertainty over the arrival of crucial parts from Asia.

Attacks on ships in the Red Sea are delivering another shock to global trade, coming on top of pandemic-related logjams at ports and Russia's invasion of Ukraine.

Houthi rebels in Yemen, seeking to stop Israel's offensive against Gaza, are attacking cargo ships plying the waters connecting Asia with Europe and the United States, forcing traffic away from the Suez Canal and around the tip of Africa. The disruption is causing delays and driving up costs – at a time when the world has yet to vanquish a resurgence of inflation.

"What’s happened right now is short-term chaos, and chaos leads to increased costs," said Ryan Petersen, CEO of the supply chain management company Flexport. "Every ship that gets rerouted has 10,000 containers on it. It’s a lot of emails and phone calls getting made to replan each of those container journeys."...

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