Continuous attacks from Houthi rebels on container vessels moving through the Red Sea are forcing companies to change their routes and making consumers wonder if they'll once again face a holiday supply chain crisis.
Shipping through the Red Sea route has declined by 90% since December 2023, according to a new report from the Defense Intelligence Agency. At least 29 major energy and shipping companies have also changed their routes which has tacked on one to two weeks of transit time and $1 million in fuel costs for each alternate route voyage around Africa.
National Security Analyst Edward Turzanski said the relentless attacks from the Houthi could have a domino effect.
"What goes on in the Red Sea doesn't mean it won't affect the Mediterranean, it doesn't mean it's not going to draw resources into a very narrow channel instead of having broad coverage for navigation," Turzanski told KTRH News.
Since November 19, 2023, there have been at least 175 attacks launched at ships in the Red Sea and Gulf of Aden. Turzanski said these attacks may not let up and shipping companies and the consumers will be impacted.
"If the Houthis, supported by the Iranians, are engaged in disruption of commerce in the Middle East and the Red Sea specifically, don't think that there won't be a cascade effect that will affect shipping overall," said Turzanski.
Companies don't want inventory sitting around. These attacks are forcing them to seek alternate routes which takes more time and adds more costs that end up falling on to the consumer. The massive vessels require a lot of fuel to cover a lot of ground.
"Time is money," Turzanski said. "If I have to wait on the raw materials or goods, it's going to add costs to the operation."
On top of that, consumers may also seek an alternate way to obtain some certain goods.
Turzanski said by not dealing with the Houthis years earlier, the attacks have only continued and will go on for an unforeseeable amount of time.