Iran-Backed Houthi Rebels' Violence in Red Sea Diverts $200 Billion in Trade, Disrupting Crucial Route, Adding To Inflation Pressures

Benzinga

Violence against ships in the Red Sea by Iran-backed Houthi rebels has led carriers to divert over $200 billion in trade away from the crucial trade route. This has resulted in longer shipping times of 2 to 4 weeks as vessels must travel around the Cape of Good Hope instead of the Suez Canal. Freight rates have doubled or more from Asia to Europe and North America due to tighter capacity and delays. About 20% of vessel capacity is unused currently due to falling manufacturing orders.

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00:00 It's Benzinga and here's what's on the block.

00:02 Violence against ships in the Red Sea by Iran-backed Houthi rebels has led carriers

00:06 to divert over $200 billion in trade away from the crucial trade route. This has resulted in

00:11 longer shipping times of 2-4 weeks as vessels must travel around the Cape of Good Hope instead

00:16 of the Suez Canal. Freight rates have doubled or more from Asia to Europe and North America due

00:20 to tighter capacity delays. About 20% of vessel capacity is unused, currently due to falling

00:26 manufacturing orders. Higher shipping costs will likely be passed on to consumers, adding

00:30 to inflation pressures. For all things money, visit Benzinga.com.

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