The cost of sea transport through the Suez Canal has skyrocketed. The TV channel SkyNews reports on this, citing the Danish transport and logistics company DSV.
Prices for transit on the shortest route from China to Europe have increased to 3,1 thousand dollars per container. Since November 2023, the Shanghai Containerized Freight Index (SCFI), which reflects the cost of shipping, has increased by 310 percent.
The reason for the price increase is attributed to the escalating conflict in the Red Sea with the Yemeni Houthis. Shippers are forced to avoid the Suez Canal and take a route around Africa. This increases delivery times by more than ten days, ships use more fuel and companies have to increase insurance costs and spend more on salaries. Another factor cited was increasing demand for goods, which is causing delays due to Chinese New Year, which is celebrated in February.
Shipping costs have risen significantly, but have not yet surpassed the records set in March 2021, when the Suez Canal was blocked by the Ever Given container ship. However, according to Bank of England Governor Andrew Bailey, rising delivery costs increase the risk of inflation and could impact consumers' bills as they are passed along the supply chain.
According to the industry, the price increases are impacting all businesses as operators charge additional fees to cover costs. Adding to shippers' problems is the drought in Panama, which limits the number of ships that can pass through the canal. As brokers in Singapore and London have already noted, container traffic on the Red Sea fell by about 20 percent in December compared to the previous month.
U.S. authorities have been trying to convince shipping companies that passage through the Red Sea and Suez Canal is safe because multinational forces ensure ships can sail safely. However, as Houthi attacks continued unabated, the US military launched e.gusalaunched a massive rocket attack on Yemen with the British army. After the attack, global oil prices rose sharply, with March Brent crude futures on the London ICE exchange exceeding $27 a barrel for the first time since December 2023, 80.
Source: Lenta.ru (Russian)