Ripple Effects Of Red Sea Attacks

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Remember when the news was all about the Ever Given? The massive container ship ran aground in the Suez Canal and blocked the vital Red Sea shipping corridor for six days, says article published on share america website.

Summary

  • Similar to the Ever Given incident, Houthi attacks on ships have led to significant delays and increased costs.
  • Transportation companies have been forced to reroute ships, resulting in longer routes and higher fuel costs.
  • Companies like Suzuki, Tesla, and Volvo have faced temporary closures or manufacturing delays due to parts shortages.
  • Producers of medical equipment have reported delays in receiving parts from Asia.

Impact On Global Supply Chains

Costly Delays: Similar to the Ever Given incident in the Suez Canal, Houthi attacks on ships in the Red Sea and Gulf of Aden have led to significant delays and increased costs for businesses and consumers.

Rerouting and Increased Costs: Transportation companies have been forced to reroute ships around the southern tip of Africa, resulting in longer routes and higher fuel costs. This ultimately affects the prices of goods and passes additional expenses onto end-users.

Consequences For Industries

Manufacturing Disruptions: Companies like Suzuki Motor Corporation, Tesla Incorporated, and Volvo Car AB have faced temporary closures or manufacturing delays in Europe due to parts shortages caused by shipping disruptions.

Medical Equipment Shortages: Producers of medical equipment, such as Man & Machine, have reported delays in receiving parts from Asia, impacting healthcare supply chains.

Global Economic Impact

Inflation Concerns: If sustained, Houthi attacks on shipping could potentially lead to a global increase in inflation, affecting the affordability of goods and services worldwide.

Vulnerability of Developing Countries: Developing countries are particularly vulnerable to disruptions in global supply chains, exacerbating existing challenges and crises.

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Source: share america