The expenses associated with moving goods across the Red Sea and the Suez Canal, a crucial maritime route for international trade, have skyrocketed by more than 300% since November. This increase is attributed to ongoing Houthi assaults on commercial ships suspected to have ties with Israel. The latest industry report, citing data examined by DSV, a global logistics firm, highlighted these substantial cost hikes.

The Shanghai Containerized Freight Index (SCFI), which is widely used to gauge these expenses, surged to $3,101 per 20-foot container compared to last Friday’s $2,871. The figures indicate that the cost of shipping a container from Shanghai to Europe has reportedly increased by 310% since the start of November.

Since mid-October, the Houthis have conducted over 24 attacks utilizing drones and missiles, targeting both commercial vessels and warships in the Red Sea. These attacks have prompted major freight companies such as MSC, Maersk, CMA CGM, and Hapag-Lloyd to reroute their cargo around the southern tip of Africa, bypassing the Gulf of Aden and the Suez Canal. The Houthis militants, who have vowed to aid Gaza amidst the conflict between Israel and Hamas terrorists, are responsible for these actions.

The diversion of the route results in a journey extension of over ten days and leads to a significant surge in insurance expenses. Concurrently, there is a rise in staff wages, and the transportation companies incur additional fuel costs due to the increased duration of the journeys.

Shipping costs, although they have risen significantly, are still lower than the levels observed in March 2021. During that time, the Suez Canal was blocked by the grounded Ever Given container ship, which resulted in the crucial trade route being inaccessible for six days. This incident caused numerous ships to be stranded and an estimated $9 billion of global trade to be delayed each day.

Earlier this week, airstrikes were initiated by the United States and UK against Houthi terrorists in Yemen as a reaction to the terror group’s banditry in the Red Sea and the Gulf. The international response to this action has been cautious, with some cautioning about the potential escalation of conflict in the Middle East.