Chart #1 —
Houthi attacks in the Red Sea cause maritime freight prices to soar
More than two weeks after the launch of the US-led Operation Prosperity Guardian, the Houthis are still laying down the law in the Red Sea. And carriers no longer want to take any risks in this area. Container ships heading for Europe and/or North America almost all avoid the Red Sea (see in red on the map below) and make very long detours, which are inevitably much more expensive.
As a result, container shipping rates have rocketed, rising by an average of almost 90% in the space of 2 weeks, and even more for some destinations. For example, shipping a 40-foot container from Asia to Northern Europe now costs more than $4,000, an increase of 173%. To date, it is estimated that carriers have diverted some $200 billion worth of trade from the Red Sea due to threats from Houthi militants.
Supply chain issues are thus back on the agenda. Did we celebrate the end of inflation too soon?
Source: Javier Blas