Shipping industry
The Cape of Good Hope diversion adds 6,000 nautical miles and three or four weeks to delivery times and has pushed up oil prices
More than 100 container ships were rerouted around southern Africa to avoid the Suez Canal. This is a sign of the disruption to global trade caused by Houthi rebel attacks on ships on Yemen's western coast.
Shipping company Kuehne und Nagel said it had identified 103 ships that had already changed course and more ships were expected to round South Africa's Cape of Good Hope.
The diversion adds approximately 6,000 nautical miles to the typical journey from Asia to Europe and potentially extends product delivery times by three to four weeks.
The Houthi rebels, allied with Iran, said they attacked ships in response to Israel's bombing of the Gaza Strip. Israel retaliates against an attack by Hamas, which controls Gaza. The United States said Tuesday it would seek to lead a naval coalition to protect shipping in the Suez Canal.
The US announces a naval coalition to protect shipping in the Red Sea from Houthi attacks
About 19,000 ships travel through the Suez Canal each year, making it one of the world's most important routes, particularly for transporting fossil fuels and goods between Asia and Europe.
The ships rerouted so far have the capacity to transport 1.3m 20ft (6m) containers, Kuehne and Nagel said. Oil and gas tankers have also rerouted, with BP the largest company to publicly announce this. Competitor Shell declined to comment.
The disruption has contributed to higher oil prices. The price of Brent crude futures, the global benchmark, rose 1.2% to above $80 on Wednesday, after falling below $74 a week earlier. Further price increases could eventually impact consumers' energy tariffs and increase inflation.
Michael Aldwell, board member for maritime logistics at Kuehne and Nagel, said: “The extended time spent on the water is expected to consume 20% of global fleet capacity, resulting in possible delays in the availability of shipping resources.” Furthermore Additionally, delays in returning empty equipment to Asia are likely to be challenging and further impact the overall reliability of supply chains.”
Companies around the world, including several major automakers, are monitoring the situation to determine whether their supply chains could be affected. The last major unexpected closure of the Suez Canal occurred in March 2021, when the container ship Ever Given blocked passage for six days.
The latest disruption will not affect retail at Christmas as stocks are built weeks or even months in advance, meaning products are already in stores or in UK warehouses.
A prolonged disruption to normal shipping patterns could ultimately lead to product shortages for consumers or parts for manufacturers, although few have reported any impact so far.
The disruption coincided with a period when many factories temporarily closed for Christmas, giving companies more time to receive essential supplies.
Some manufacturers had already shifted from “just-in-time” supply chains that relied on goods arriving on time to a less efficient but more resilient “just-in-case” model with more emergency stocks of parts.
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