Overview

• Attacks by Iran-backed Houthi militants in the Red Sea have disrupted global shipping, leading to increased costs and delays that are expected to be passed down to consumers.
• Shipping through the Suez Canal and Red Sea has dropped 42% over the last two months, causing many shipping companies to reroute around the Cape of Good Hope in South Africa, which adds significant travel time and costs.
• Shipping insurance costs have spiked, and ships now require specialty war risk insurance, which has increased fiftyfold since the attacks began.
• Companies such as Tesla and Volvo have paused some of their production due to an inability to get necessary components, signaling potential supply constraints and price increases for consumers.
• Egypt, which relies heavily on transit fees from the Suez Canal, has seen a 40% drop in income compared to last year due to decreased ship traffic.