Attacks On Red Sea Shipping Disrupting Retail Supply Chain
Attacks on shipping in the Red Sea in recent weeks, including on container vessels, are disrupting worldwide retail supply chains, causing new headaches for retailers in the United States.
Some retailers are seeing delays of as much as two weeks as a result.
“Attacks on cargo ships in the Red Sea have been in the headlines and the disruptions caused by those attacks have once again created volatility in retail supply chains,” National Retail Federation Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement.
“Retailers are working with their carrier partners on mitigation strategies to limit the impact, but we are seeing longer transit times and increased costs as a result.”
The attacks by Houthis, an Iran-backed rebel group that controls part of Yemen, began late last year on ships passing through the narrow strait of Bab al-Mandab on their way to Europe and North America via the Suez Canal. The U.S. and other nations have begun naval operations in the area to counterattack Houthi forces, which began launching attacks after the start of the Israel-Hamas war in October.
Houthis have backed Hamas, announcing they would target any ships headed to Israel, according to the BBC. It is not clear whether the rebels have limited their attacks to those vessels, the news outlet reported.
While the attacks won't impact the number of container ships arriving at East Coast ports, there will be delays, according to Ben Hackett, founder of Hackett Associates, an international trade consultancy that tracks traffic to U.S. ports. Ships are now avoiding passage through the Red Sea on their way from East Asia to ports on the East Coast, navigating around the Cape of Good Hope at the southern tip of Africa, adding time to the route.
As many as 18 shipping companies have decided to reroute their vessels around South Africa to reduce risks, according to Arsenio Dominguez, secretary general of the International Maritime Organization.
“This requires 10 additional days of travel, paying higher freight rates and dealing with negative impacts on trade,” Dominguez said in a statement.
Major shipping firms now avoiding the Red Sea include Mediterranean Shipping Co., Maersk, Hapag-Lloyd and the oil company BP, the BBC reported.
