12° Nicosia,
18 June, 2024

Japanese shipping giants halt Red Sea routes amid rising security concerns

Major disruptions in global trade routes as Houthi attacks prompt safety measures


In a significant development, Japan's three major shipping companies, Nippon Yusen, Kawasaki Kisen Kaisha, and Mitsui O.S.K Lines, have suspended navigation through the Red Sea due to ongoing Houthi rebel attacks on vessels. This decision, aimed at ensuring the safety of crews, is already causing disruptions in one of the world's busiest trade routes.

The Red Sea serves as a vital route for Japanese goods destined for Britain, particularly impacting manufacturing and automotive industries. Marco Forgione, Director General of the Institute of Export & International Trade, emphasized the importance of the Red Sea route for Japanese goods heading to Britain. The disruptions could potentially lead to increased costs for shipping firms, extended delivery times, and potential price hikes for UK consumers.

The situation is intertwined with the broader geopolitical context, as the attacks by Houthi rebels have escalated tensions in the region. The ongoing conflict has prompted concerns about the Israel-Hamas war spreading across the area, further disrupting trade in a key maritime commercial route.

The repercussions of these disruptions are already evident, with over 350 ships being rerouted around the Cape of Good Hope. This detour not only adds considerable time to journeys but also incurs substantial additional costs, estimated to be in excess of a million dollars in fuel expenses alone.

Experts are warning of potential inflation and price rises in the UK if the conflict persists or intensifies. The current disruptions have already led to a doubling of shipping costs over the past three weeks, with freight companies forced onto longer, more expensive routes.

As the situation unfolds, the international community is closely monitoring the impact on global supply chains, emphasizing the need for resilience and strategic planning in the face of growing instability.

[Source: Daily Mail]

Business: Latest Articles