Canadian businesses and consumers could soon feel the impact of attacks on shipping in the Red Sea.
International shipping carriers are avoiding this important trade corridor after Houthi militants in Yemen stepped up attacks on commercial vessels to protest Israel’s military campaign in the Gaza Strip.
Shipping giant Maersk announced Friday that it would avoid the Suez Canal and the Red Sea, passing through South Africa’s Cape of Good Hope “for the foreseeable future.”
The route change adds 10 days and hundreds of thousands of dollars in additional fuel and labor costs, leading to potential price increases for wholesale and retail products.
Yan Cimon, a business professor at Laval University, says Europe will feel the most direct effects, but consumer goods and some manufacturing parts destined for Canada also pass through the canal, which handles about a third of traffic. container world.
Data from Drewry, a shipping industry research firm, shows that global container shipping rates have jumped 61% in the last week alone. Increases are also observed on routes between Asia and North America.
To watch on video