Global Trade Explores Options amid Red Sea Turmoil

Global Trade Explores Options amid Red Sea Turmoil

Exporters are scrambling to find alternative ways, whether by air, land or sea, to deliver key consumer goods to retailers, as a series of attacks in the Red Sea exacerbate problems in maritime shipping supply chains around the world.

The Iranian-backed Yemeni Houthi group has intensified its attacks on ships in the Red Sea since Nov. 19 to show support for the Hamas movement as the Israeli military offensive in Gaza continues.

The attacks disrupted a major trade route linking Europe and North America to Asia via the Suez Canal, and container shipping costs rose more than threefold at times as companies sought to transport their goods via alternative, often longer, sea routes.

Standard & Poor’s Global said in a report that if there are prolonged disruptions, the consumer goods sector, which supplies the world’s major retail companies such as Walmart and IKEA, will face the greatest impact.

Alan Baer, CEO of OL USA, noted that he has teams advising shipping and logistics clients to prepare for disruptions in the Red Sea that could extend for at least ninety days.

Jan Kleine-Lasthues, chief operating officer airfreight with leading German freight forwarder Hellmann Worldwide Logistics, said that companies were now trying to switch to what is