Amidst disruptions in the Red Sea due to Houthi attacks on vessels, more than 100 container ships have altered their routes away from the Suez Canal, according to The Guardian.
The British newspaper reported that ships are navigating through the Cape of Good Hope in South Africa, bypassing the shorter route through the Suez Canal.
This route change adds about 6,000 nautical miles to their usual commercial journeys between Asia and Europe, potentially causing delays of 3 to 4 weeks in cargo delivery times.
Around 19,000 ships traverse the Suez Canal annually, making it one of the world’s major trade routes, especially for fossil fuels and goods moving between Asia and Europe.
The disruptions in shipping routes have contributed to rising oil prices, with Brent crude futures jumping 1.2% above $80 per barrel on Wednesday, following a drop to less than $74 a barrel the previous week.
The additional price increases could eventually lead to higher energy costs, further exacerbating inflation.
These disruptions have coincided with a period where many factories temporarily closed for the Christmas holidays, giving companies some extra time to secure vital supplies.
On Wednesday, the Swiss-based transportation and logistics company Kuehne and Nagel stated that 103 ships have already changed their routes, with more expected to pass through the Cape of Good Hope in South Africa.
Michael Aldworth, a board member of the company, stated, “Long-haul journeys are expected to affect 20% of international maritime shipping, potentially causing delays.”
Oil and gas tanker routes have also been redirected, with British Petroleum (BP) publicly confirming this.
Several other companies have also expressed their intention to temporarily avoid routes through the Red Sea, including Danish shipping and logistics company Maersk, Belgian shipping company Euronav, French transport group CMA CGM, German shipping company Hapag-Lloyd, and others.
