Escalating tensions in the Red Sea has put the global economy in a crisis as global supply chains have been disrupted and freight costs have been accelerating at a rapid pace.
Freight rates have been rising tremendously, especially on the Shanghai to Rotterdam route for WCI Container Freight Benchmark Rate per 40 Foot Box, after the attacks from Houthi fighters on commercial vessels.
According to the data index compiled by Bloomberg for WCI Shanghai to Rotterdam Container Freight Benchmark Rate per 40 Foot Box, the freight rate rose to 4,406 last week, up from about 1,000 in the final quarter of 2023, which is about 340% rise. This is the highest level since the disruption of global trade during the Covid-19 pandemic years.
Houthis vowed to retaliate after the U.S. and U.K. launched strikes against the group’s targets in Yemen several times late last week and during the weekend in response to attacks from the group on shipping vessels that destabilized trade routes in the Red Sea and disrupted global supply.
“America and Britain will undoubtedly have to prepare to pay a heavy price and bear all the dire consequences of this blatant aggression,” Houthi senior official Hussein al-Ezzi wrote on a Google-translated X (formerly Twitter) last Friday.
