Houthi Attacks Reroute Ships Around Africa, Trigger Shipping Backlogs and Renewed Inflation Fears
• Attacks by Houthi rebels in the Red Sea have caused shipping companies to reroute vessels, avoiding the Suez Canal. This has led to a 61% spike in an index tracking container shipping rates.
• Rerouting vessels around Africa's Cape of Good Hope makes journeys about 40% longer. This delays the transport of goods from Asia to Europe and the US.
• Longer journeys and increased insurance costs are driving up shipping companies' expenses, which they may pass onto consumers through higher prices.
• Analysts warn the shipping disruption could trigger a second wave of global inflation after recent cooling.
• 15% of total global shipping passes through the Suez Canal each year, so the impacts could be far-reaching across many goods.