Inflation-weary US shoppers face price hikes amid Red Sea terror attacks on shipping
Inflation-weary US shoppers could again start seeing prices inch up just as they were beginning to fall — because of terror attacks on shipping containers halfway around the world.
Yemen’s Houthi rebels, backed by Iran, have been hounding commercial ships in the Red Sea as they take the quickest route between Europe and Asia, through Egypt’s Suez Canal, in a move of support for Palestinians amid the Israel-Hamas war.
The threat has forced shipping giants — including Denmark-based Maersk, French shipping giant CMA CGM and China’s COSCO — to take the longer route past the Cape of Good Hope, around the south of Africa.
The journey adds between two to four weeks of transit time — a costly maneuver given the additional resources needed to sustain the longer passage.
“It’s about an 8% longer journey, which is going to drive prices up quite a bit for ocean freight — that’s a material impact on prices for the goods themselves,” Ryan Petersen, the CEO of logistics technology company Flexport, told .
About 12% of the world’s trade goes through the Suez Canal.
Though it wasn’t immediately clear just how much costs could possibly spike, the price of “most of the stuff that you see in all the stores” — other than food, raw materials and energy — will be affected, he told the outlet.
Supply-chain disruptions were a major factor in driving up prices in the US — blamed in part on the pandemic and Russia’s invasion of Ukraine — and are a major concern for President Joe Biden heading into next year’s election.
Wholesalers and retailers will foot part of the bill of the increased shippꦚing costs, according to George Kochanowski and Richard Danderline, CEO and chief financial officer of Staxxon, a company that makes shipping containers, especially on items with tight profit margins and competitive pricing, per the Washington Post.
However, as shippers avoid the Red Sea, the resulting traffic “will ultimately metastasize to the entire world,” Danderline said.
Congestion in the Panama Canal,🅷 for instance, is expected to worsen as the conflict continues.
The Post has sought comment from CMA CGM, COSCO and Maersk — the world’s largest shipping company that transports goods for H&M, Nike, Amazon, Ozempic-maker Novo Nordisk and Ikea.
The Swedish discount-furniture giant Ikea has already warned that it’s experiencing supply-chain delays bꦑecause of the terrorist attacks and resulting Red Sea diversions.
“The situation in the Suez Canal will result in delays and may cause availability constraints for cꦰertain Ikea products,” an Ikea spokesperson confꦅirmed to the Washington Post last week.
The spokesperson noted that it was “evaluating other supply options to secure the availability of our products,” but would prꦏioritize the safety of staff working in its supply chain.
In recent weeks, Houthi rebels’ attacks on commercial ships in the Red Sea have intensified. This week, experts cautioned that the unsettling effort by Iran seeks to “defeat the United States” and “spread the Iranian Islamic revolution.”
“🍷We are pretending we’re not at war. But the Iranians and the Houthis are at war with us,” Bill Roggio, s🦋enior fellow for the Foundation for Defense of Democracies, told the publication Wednesday.
The Houthis have launched at least 100 attacks against 14 different commercial and merchant vessels in the Red Sea over the past month, including a Dec. 3 attack in which three commercial vessels with rocked by missiles.
But sinking ships is not the higher goal of the☂ attac🏅ks, according to Roggio.
“The act of targeting itself ꦦis sufficient,” the military expert said.
“The Houtꦗhis and the Iranians are dictating the transit of maritime 🅘vessels on the high seas. This is incredible and the world seems powerless to stop it.”
The Pentagon announced a new par﷽tnership to counter the growing number of𝔍 attacks by Iran𝔍ꦓian proxies ;on commercial ships in the Red Sea.
“This is an international challenge that demands collective 🍌action,” Defense Secretary Lloyd Austin said in a statement from Bahrain, adding: “The recent escalation in reckless Houthi attacks originating from Yemen threatens the free flow of commerce, endangers innocent mariners and violateꦚs international law.”
The US will be joined in the new coalition — dubbed “Operation Pro🥂sperity Guardian” by the Pentagon —🎶 by the United Kingdom, Bahrain, Canada, France, Italy, the Netherlands, Norway, the Seychelles and Spain.
Some countries will conduct joint🥃 patrols while others provide intelligence support in the southern Red Sea and the Gulf of Aden.
