Houthi attacks re-route Red Sea shipping, raising inflation concerns

The news: Maersk has re-routed four container ships from the Red Sea back towards the Suez canal and the long route around Africa to avoid attacks, Reuters reports. Yemen-based Houthi rebels have been attacking what they claim are Israel-aligned container ships in the Red Sea in solidarity with Palestine, disrupting global freight and raising fresh inflation concerns.

The numbers: Five Maersk container ships were paused in the Red Sea south of Saudi Arabia in recent days, with four sent back. The fifth ship is still halted but will not travel past Yemen, a Maersk spokesman said. The Danish shipping company last month announced a USD700 ($1044) shipping disruption charge to each standard 20-foot container travelling between China and Europe.

The context: To detour around the southern tip of Africa adds an extra 10 days and significant fuel costs to the 26-day journey between Europe and Singapore via the Suez Canal. The Red Sea accounts for more than a tenth of world trade. Yesterday, a group of UN security council members issued a joint statement warning Houthi rebels against making further attacks to avoid triggering a broader regional conflict.