The unfolding crisis in the Red Sea, marked by Houthi attacks and the rerouting of ships to the Cape of Good Hope, has triggered a sharp decline, impacting over 20% of the world’s container trade. Jan Hoffman, head of the Trade Logistics Branch at UNCTAD (United Nations Conference on Trade and Development), highlighted these alarming statistics during a press conference on Thursday, underscoring the ripple effects on global supply chains and consumer prices.
Hoffman revealed that the number of weekly container ships navigating the Suez Canal witnessed a staggering 67% year-on-year decrease, intensifying disruptions to global trade. Oil tanker traffic also experienced an 18% decline, while the transit of bulk cargo ships, crucial for transporting grains and coal, saw a 6% dip. Gas tankers came to a standstill, exacerbating the challenges faced by this vital maritime route.
The Red Sea crisis, fueled by escalating Houthi attacks in Yemen, has created a domino effect on major shipping routes globally. Hoffman emphasized that, in addition to the Suez Canal situation, other key routes, including those in the Black Sea due to the Russian-Ukrainian war and the Panama Canal grappling with lower water levels, are under immense pressure.
The UNCTAD official cautioned that prolonged disruptions to significant trade routes could severely hamper global supply chains. Delays in the delivery of goods, increased costs, and the looming threat of elevated consumer prices are on the horizon if the crisis persists. Hoffman emphasized that maritime transport serves as the lifeblood of global trade, constituting over 80% of the volume of international merchandise trade.
The region’s unrest has further intensified after the United States and Britain launched air and sea strikes on Houthi military targets in Yemen. With the largest shipping companies rerouting their vessels around the Cape of Good Hope, a more expensive and time-consuming alternative, the crisis threatens to escalate the prices of goods and merchandise for consumers worldwide.
