Source BNN

HONG KONG, SAR: The global shipping industry is currently in the throes of significant disruption, with the turmoil expected to persist for several months. This is primarily due to conflicts in the strategically located Red Sea. A.P. Moller-Maersk A/S, the world’s second-largest container line, has indicated that 15 of its container-line routes are impacted. 
This includes key shipping lanes between Asia and Europe, and from the US East Coast to the Middle East. The company’s announcement is a reflection of over 150 tankers that have had to reschedule their arrival dates, with some delays extending into March.
Missile Attacks Disrupt Global Trade Flows
What’s causing this upheaval in global trade flows? The answer lies in the escalating conflict in the Middle East. Drone and missile attacks by Yemen-based Iranian-backed Houthi rebels on ships in the Red Sea have greatly disrupted global supply chains. 
In response, the United States has set up a 10-nation naval task force, dubbed Operation Prosperity Guardian, to protect ships navigating this crucial route. In the absence of an overarching framework to manage shared security priorities across the Red Sea, this remains a significant challenge.
Shipping Companies Reroute to Avoid Red Sea
Given the risks associated with the Red Sea route, major firms, including shipping giants MSC, Maersk, Hapag-Lloyd, and British oil behemoth BP, have chosen to reroute their ships. This, however, is not without its consequences. 
Rerouting is expected to add up to two weeks to shipping times and over $1 million to transportation costs. This has caused a bottleneck in the supply of ships, driving up short-term rates, and creating a ripple effect that could lead to increased prices for a range of consumer products, from oil to electronics and furniture.
Global Businesses Grapple with Shipping Crisis
The crisis is causing global businesses to face uncertainty due to a dearth of vessels for the export rush before China’s New Year celebrations. To circumvent the issues in the Red Sea, ships are being rerouted around the Cape of Good Hope, resulting in longer transit times and significant logistical challenges. 
This situation underscores the fragility of international shipping lanes and the potential for significant impacts on global trade when key routes are disrupted. The escalating conflict in the Middle East is expected to continue disrupting shipping, leading to increased airfreight demand and potential use of sea-air services.