Missile strikes by the US and UK against Houthi militia in Yemen has brought heightened tensions across the region with disruption to ocean freight shipping set to deteriorate further, says an article published on xeneta website.
Summary
- The U.S. and UK conducted missile strikes in Yemen in response to 27 Houthi militia attacks on merchant ships in the Red Sea since November 19, escalating tensions across the region.
- The situation has raised concerns about the disruption to ocean freight shipping, which is expected to worsen in the short term.
- Peter Sand, Chief Analyst at Xeneta, suggests that the missile strikes could be the “beginning of the endgame” in the crisis. However, the path to resolution is uncertain.
- Houthi attacks have compelled ocean freight container ships on critical trade routes to divert around the Cape of Good Hope in Africa. This disruption has led to increased ocean freight shipping rates.
- Shippers are turning to platforms like Xeneta to assess risks and make data-led decisions to safeguard their supply chains.
- As the crisis persists, disruption to ocean freight shipping is expected to continue globally, leading to delays, missed port calls, and rising costs.
Military Response To Houthi Attacks, Heightened Tensions In The Red Sea Region
In response to 27 Houthi militia attacks on merchant ships in the Red Sea since November 19, the U.S. and UK conducted missile strikes in Yemen, marking an escalation in tensions across the region. The situation has raised concerns about the disruption to ocean freight shipping, which is expected to worsen in the short term.
Potential Resolution Or Escalation, Uncertain Path Ahead
Peter Sand, Chief Analyst at Xeneta, a leading ocean freight shipping rate benchmarking and intelligence platform, suggests that the missile strikes could be the “beginning of the endgame” in the crisis. However, he emphasizes that the path to resolution is uncertain, and in the short term, challenges for ocean freight supply chains are likely to intensify before improving.
Impact On Critical Trade Routes, Forced Diversions And Rising Costs
Houthi attacks have compelled ocean freight container ships on critical trade routes through the Suez Canal, from the Far East to the Mediterranean, North Europe, and the U.S. East Coast, to divert around the Cape of Good Hope in Africa. This disruption has led to increased ocean freight shipping rates from the Far East to the Mediterranean and North Europe, with projections of up to a 200% increase since mid-December in the next seven days.
Xeneta’s Data Insights, Shippers Rely On Data-Led Decisions
Shippers are turning to platforms like Xeneta to assess risks and make data-led decisions to safeguard their supply chains. Peter Sand emphasizes the need for a calm situation for safe voyages through the affected area, acknowledging that vessels are already avoiding the region due to the Houthi attacks.
Long-Term Disruption And Rising Costs, Challenges For Global Shipping
As the crisis persists, disruption to ocean freight shipping is expected to continue globally, leading to delays, missed port calls, and rising costs. The prolonged nature of the crisis raises concerns about the impact on consumer prices and the overall stability of ocean freight supply chains.
Iran’s Potential Response And Middle East Tensions, Unpredictable Future
While tensions in the Middle East are not new, the involvement of Iran, supporting Houthi attacks, introduces an unpredictable element. Previous statements from Iran suggest potential military action in the Strait of Hormuz in response to intervention by the U.S. or its allies. The situation remains fluid, and a resolution to the crisis is anticipated to take months rather than weeks or days.
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Source: xeneta
