HOUTI ATTACKS: THE IMPACT OF CONFLICT ON THE SUEZ CANAL

For several months now, attacks by Houthi rebels in the Red Sea have been disrupting world trade by directly affecting the Suez Canal. This instability has led to a reorganization of shipping routes and higher costs for shipping companies. We take a closer look at the situation.

A WORRYING MODUS OPERANDI

Yemen-based Houti rebels use drones and speedboats to attack merchant ships in the Red Sea, motivated by solidarity with Palestinians in the Gaza Strip. As a result, the Bab el-Mandeb Strait, a strategic corridor for trade between Asia, Europe and Africa, has become a dangerous zone, forcing many shipowners to divert their routes.

DISRUPTION TO SUEZ CANAL TRAFFIC

These attacks are having a direct impact on the Suez Canal, a crossing point that usually accounts for 10% of world trade. Since January 2024, container ship traffic has plummeted by 67% year-on-year, putting the Egyptian economy under severe strain. Unprecedented, even during the 2020 pandemic! The majority of ships linking Europe to Asia now have to round the Cape of Good Hope, extending their itinerary by 4,000 nautical miles, doubling the journey time by up to 20 additional days.

IMPACT ON THE GLOBAL ECONOMY AND THE ENVIRONMENT

This leads to higher operating costs, including a 30% increase in fuel consumption and high insurance premiums. The price of oil, among other things, is on the rise, impacting end consumers. On the other hand, international trade is experiencing considerable delays, putting pressure on the supply chains of certain plants. Finally, these detours lengthen journey times, exacerbating the carbon footprint of ships, with a negative impact on the environment.

Faced with these challenges, companies need to strengthen the resilience of their supply chains and invest in innovative, sustainable solutions to secure their maritime routes.

For more information on the impact of geopolitical crises, visit the “News” section of our blog and find out about our tailored solutions.