Transcript:
The US and the UK hitting Houthi targets in Yemen is largely the result of a sense of panic taking place in commercial and business circles. The Houthis have clearly identified that there is a choke point that they can squeeze even more to get their positions heard. And what is happening up north, is certainly alarming not only for shipping companies and their clients, but also for Egypt and for those who invested billions in the Canal.
While already experiencing major problems of its own, the Egyptian economy is facing another pain point, with activity dropping considerably at the Suez Canal. Although this was easily expected, the extent of the impact on Egypt of the Houthis’ targeting commercial ships on the Red Sea, was not clear but it has now been quantified by the Egyptian government, as reported by Reuters. The Suez Canal’s management says revenues fell 40% at the start of the year, with Reuters saying ship traffic fell by 30% from 1 to 11 January on a year-over-year basis.
For its part, AP reported data showing the number of containers dropping by 66% compared to the pre-pandemic 2017-2019 average, sending the cost of a standard 40-foot container moving from China to northern Europe increasing from $1,500 to $4,000, according to AP.
AP also reported some interesting information on how some companies are coping with this drama. It says Tesla has just decided to shut down its plant near Berlin, Germany from the end of this month to 11 February, as a result of supply-chain disruptions.
