Container rates soar amid fears of Houthi retaliation for strikes by US and UK
- All ships have been told to steer clear of the Red Sea route, adding to concerns about a prolonged disruption to commercial shipping
- Major players in the ocean shipping industry that handles upwards of 90 per cent of global trade are bracing for months of cost-stoking upheaval
Container shipping rates for key global trade routes have soared this week, with US and UK air strikes on Yemen stirring fears of a prolonged disruption to global trade in Red Sea, one of the world’s busiest routes, industry officials said on Friday.
US and British warplanes, ships and submarines launched dozens of strikes across Yemen overnight, retaliating against Iran-backed Houthi forces for attacks on Red Sea shipping, widening regional conflict stemming from Israel’s war in Gaza.
Most container ships already were avoiding the nearby Suez Canal, a short cut between Asia and Europe that handles 12 per cent of global trade.
Now, US and UK militaries have advised all ships to steer clear of the conflict zone. That stoked fears that rates for oil tankers and bulk carriers that ferry vital commodities could surge, raising the risk of a new round of global inflation.
03:21
US-led coalition strikes Iran-backed Houthi fighters in Yemen
The warning in a notice to shippers came as Yemen’s Houthis vowed fierce retaliation for the US-led attacks. The White House said the US expects the Houthis to try to strike back.