Houthi Attacks in Red Sea Disrupt Global Shipping, Impacting Economies and Consumers

Shipping reroutes around Cape of Good Hope increase costs and delays, while Egypt sees significant drop in Suez Canal transit fees.

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.