Sudden! Husai missile attacks on American merchant ships, escalating the Red Sea crisis and threatening global trade!

Is it difficult to find another box?
Since mid December 2023, the Red Sea crisis has continued to escalate.
Last week, the Husai armed forces launched the largest missile and drone attack on passing ships to date,
On January 10th, the United Nations Security Council passed a resolution calling on the Housai armed forces to cease attacks on merchant ships;
On January 12th, the United States and Britain used fighter jets and missiles to attack the Yemeni capital Sanaa, the Red Sea city of Hodeida, and the province of Haj, further spreading the crisis;
On January 15th, an American merchant ship was hit by a missile, and the Houser armed forces responded by including all American and British warships in the attack range. The United States immediately warned its ships to avoid the South Red Sea!
The current conflict has caused sudden regional tensions and has had a significant impact on international trade.
"A box is hard to find" or reproduce
Vespucci Maritime, a shipping consulting firm, predicts and analyzes the shipping market based on the Red Sea situation in the past month. It shows that before the Chinese New Year, the number of container containers arriving at Asian ports will decrease by 780000 TEUs compared to before. The shortage of Asian containers will have a significant impact on the supply chain, even more severe than the shortage of shipping capacity.
Sea Intelligence, a shipping analysis firm, predicts that the shipping industry has reduced its effective capacity by 1.45-1.7 million TEUs due to detours around the Cape of Good Hope, accounting for 5.1% -6% of the global total capacity.
Based on the reduction of effective transportation capacity, the logistics technology platform Flexport has previously warned that the Red Sea crisis will trigger a series of chain reactions, and it is expected that the shortage of containers may be concentrated in Asian ports as early as mid to late January.
On the other hand, there has been a significant increase in shipping costs.
Around December 23rd last year, global shipping companies such as Maersk, MSC, DaFei, and Herbert proposed various surcharges such as Transport Interruption Surcharge (TDS), Red Sea Surcharge (RSC), Emergency Operations Surcharge (EOS), Operations Recovery Surcharge (OCR), and Peak Season Surcharge (PSS), leading to a continuous increase in freight rates.

Drury's World Container Index tracks container freight rates across 11 major trade routes. At present, the index has surged from $1390 per 40 foot container before the Israeli Palestinian conflict to $3090 last week, an increase of 121%.

The latest data released by Drury on January 11th also showed that the latest Drury World Container Index rose by 15%, reaching $3072 per 40 foot container. This is the highest index since October 2022, 116% higher than the average rate of $1420 in 2019 (before the pandemic).
There are reports that the market freight rate for 40 foot containers destined for Nordic ports in January has exceeded $10000.
Supply chain disruption
The Red Sea accounts for 15% of global shipping volume and 30% of global container transportation volume every year. According to IfW Kiel, a German economic research institute, from November to December 2023, global trade decreased by 1.3% due to a sharp drop in cargo transportation in the Red Sea region caused by the situation in the Red Sea.
Swedish furniture giant IKEA stated at the end of December last year that due to the Red Sea situation, consumers should expect a "delay" in IKEA's product supply, and even "some supply restrictions".
The latest news is that Tesla announced on January 11th that the company will suspend most of its car production at its factory near Berlin from January 29th to February 11th, citing a change in transportation routes caused by an attack on the Red Sea vessel, resulting in a shortage of parts.
Thomas Goldsby, a professor of supply chain management at the University of Tennessee, bluntly stated that if the situation is not resolved before February 10th, American companies will face significant cost increases in the face of supply chain disruptions. "At that time, if the situation continues to escalate rather than ease, we will have to start discussing changes in supply chain configuration, perhaps seeking alternative sources of supply for goods in other parts of the world, rather than just seeking short-term solutions."
Reuters reported that for consumers, increased shipping costs mean higher commodity prices. If the situation in the Red Sea worsens further, it will lead to a continued increase in container transportation costs and a further decline in global trade.
"The real risk now is that the Red Sea war will push up prices as inflation begins to slow down. The World Bank has issued a warning that global supply chains will once again be in danger," said Liam Burn, Chairman of the House of Commons Business and Trade Committee
Surrounding countries affected
At present, the trade of countries around the Red Sea has been greatly affected.
The trade activities of Jordan, a Middle Eastern country, are highly dependent on the Red Sea. Due to the impact of the Red Sea crisis, Jordan's import and export trade and supply chain have been greatly affected.
Aqaba is the only seaport city in Jordan, with the Israeli port city of Eilat in the distance. Previously, the Hussai armed forces announced that they would prevent all countries' merchant ships from traveling through the Red Sea to Israeli ports. Although the port of Aqaba was not a target of the Hussai armed forces, it was also affected by the proximity to the Israeli port city of Eilat.
According to a report released by a Jordanian think tank, Jordan's import volume in 2022 was approximately $27.3 billion, with one-third of its import activities taking place through the Red Sea. Analysts have pointed out that if the Red Sea crisis is not resolved in a short period of time, the high risks it brings will lead to a decline in Jordanian trade activities and supply chain problems, which will have an impact on the Jordanian economy.
In addition, Egypt is currently experiencing a serious economic crisis, and the Suez Canal transit fee is one of the country's main sources of foreign exchange, with an annual income of over 9 billion US dollars. If the situation in the southern Red Sea gets out of control, the scarce US dollar Egyptian economy will suffer huge losses.
The Suez Canal Authority (SCA) in Egypt recently stated that it is "closely monitoring" the tense situation in the Red Sea and any impact on canal transit.
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