Red Sea tensions: a global impact
Missile attacks in the Red Sea – most recently on two commercial vessels, the 'Gibraltar Eagle' and the bulk carrier 'Zografia'- continue to disrupt global supply chains.
Despite air and missile strikes by the USA, the UK, and their allies in Houthi-controlled Yemen, the attacks have not ceased. They have reduced vessel traffic through the Suez Canal by 68% and forced 264 ships to reroute, causing widespread shipping delays.
Consequently, there is increased traffic on the Asia to the US West Coast route, with longer journey times, and a growing demand for alternative transport modes like sea-air services and China-UK rail services to mitigate transit disruptions and costs.
There has also been a surge in container demand, with over 750,000 teu ISO containers ordered from China recently, and a sharp rise in war risk insurance premiums for ships in the Red Sea.
The Federal Maritime Commission (FMC) will conduct a public hearing on 7 February 2024 to assess the impact of these disruptions on commercial shipping and global supply chains. (pb)