Congestions south of the Suez Canal and shipping companies avoiding the Red Sea altogether are likely to cause further delays and price increases in the technology sector, experts warned.
Reuters has confirmed that two major cargo companies, including MSC, have confirmed plans to avoid the Red Sea as Houthi militants have stepped up their attacks on commercial ships in the Red Sea. Many companies have already begun rerouting routes, while others have reportedly turned off tracking devices as they navigated the conflict zone in the hope of passing unnoticed.
Oil ships have been a major target of the movement, but other commercial ships, including those bringing parts and hardware from Asia to Europe, are also likely to be increasingly affected.
Consumers will suffer from the attacks on the Suez Canal
The perpetrators have said the aggression targets ships bound for Israel, as a show of support for Hamas, which has been in heightened conflict with Israel since early October 2023.
Fears of higher oil prices are already beginning to spread across many of the countries that rely on the route that runs through North Africa to Europe, but new reports are emerging suggesting that the entire supply chain of countless industries could be at risk come.
a BBC The report cites research from analysts at S&P Global Market Intelligence, which shows that nearly 15% of goods imported into Europe, the Middle East and North Africa are shipped by sea from Asia and the Gulf. A Red Sea route typically saves ships thousands of kilometers and several days compared to passing the Cape of Good Hope, South Africa.
The BBC is already saying that shipping costs have risen by 4% in the past week. As costs continue to rise, the additional costs may be passed on to consumers.
For an endless list of reasons, including data sovereignty and protection, many European states have taken charge of their own infrastructure, and the continent's cloud market is seeing significant growth.
All this means that Europe is highly dependent on the import of chips and other components from Asian countries. A ship sailing from Taiwan via South Africa could take up to ten days longer to reach its destination in Europe, compared to the approximately 25 days it would take via the Red Sea, ultimately costing consumers and businesses even more can cost.
The extent of the impact on consumers has yet to reveal itself, but for now we are warned of further disruptions.