World trade under threat, large companies stopped sailing over Houthi attack
After December 15, four of the world’s five largest container ships stopped sailing in the Red Sea. Ships coming from the Suez Canal have to follow this route. The situation arose after Yemen’s Iran-backed Houthi rebels attacked ships in the Red Sea.
On 15 December Maersk ceases shipping; Then CMA, CGM and MSc followed their path. MSC, the company that owns the Palladium 3, the target of the Houthi attack, has diverted its vessels from the Suez Canal due to security concerns. Now they sail around Africa with Uttamasha Antrip. In fact, 53 percent of global container shipping is handled by these four companies. If they take this decision now, smaller shipping companies are expected to follow their lead in fear.
The Economist said that the Houthis are attacking with modern weapons. The US and its allies are increasing naval activity in the Middle East as the attack shuts down one of the world’s most important trade routes. They may even attack Houthi rebels to de-risk trade routes.
Closure of shipping through the Suez Canal would increase both shipping time and cost; Along with that, there will be a crisis in product supply. In 2021, the global supply crisis intensified when the Taiwan-operated ship Evergiven was stuck in the Suez Canal for six days.
In addition, the Suez Canal is a major source of revenue for Egypt. They are already in economic crisis, now if shipping through the Suez Canal is stopped for a long time they will be in big trouble. This would not pose much of a crisis for Israel, as only 5 percent of its total trade goes through the Red Sea port of Eilat.
