in the region.
Several major shipping companies are rerouting their cargo away from a major waterway that leads to the Suez Canal due to a string of attacks by Iran on ships.from their
According to data collected by Freightos, the Houthis, who are supported by Iran, have declared their intention to attack ships believed to be linked to Israel. This is seen as a display of support for Hamas, the militant group based in Gaza that has been in conflict with Israel.on the country.
Inter IKEA Group, the parent company of Swedish furniture retailer IKEA, informed CBS MoneyWatch on Thursday that the current circumstances in the Suez Canal could lead to product delays and potential limitations on the availability of certain IKEA goods.
Equinor, Evergreen, Hapag-Lloyd, Maersk, Orient Overseas and ZIM have all said they plan to avoid the Red Sea while the violence persists, and energy company BP said Monday it has suspended gas and oil shipments in the area.
According to the U.S. Naval Institute, before the recent series of attacks in the area, 12% of worldwide trade went through the Suez Canal.
The rerouted shipments will now travel through a different path near the southern end of Africa, resulting in longer travel times for shippers. According to data from Freightos, shipping expenses have increased by 14% as freight carriers choose to avoid the Suez Canal due to the increased danger of attacks.
According to Eytan Buchman, Chief Marketing Officer at Freightos, the consequences of trade diversions will be significant, leading to increased lead times and expenses until security is restored.
According to Bloomberg, other businesses are taking measures to safeguard their supply chains due to the risk of attacks on ships in the Red Sea. One such retailer, Abercrombie & Fitch Co., intends to switch to air transportation in order to ensure prompt delivery and avoid potential delays.
In the meantime, actions are being taken to enhance safety in the area. The United States is creating a coalition of 10 nations to suppress Houthi assaults in the Red Sea, according to a statement from U.S. Secretary of Defense Lloyd J. Austin III on Monday.