Houthi attacks on ships impact global supply chain

The conflict in the Red Sea is taking a big toll on global distribution and production. Yemen's Houthi rebels have been attacking ships, saying they are doing so to show solidarity with Hamas.

The number of attacks since November has topped 30, prompting major shipping companies to avoid the route and instead travel around the Cape of Good Hope.

The trip takes an extra 7 to 20 days and carries extra costs. Freight fees have shot up by 180 percent since the Israel-Hamas conflict started.

German detergent maker Gechem is one of many companies in Europe struggling with the fallout.

It imports ingredients from China and Taiwan, and deliveries are delayed by about 2 weeks.

The company's CEO Martina Nighswonger said, "We never anticipated this crisis. The situation will be very difficult next month. We don't expect the materials to arrive as scheduled."

Transportation costs are rising for those who continue to navigate the Red Sea route. Officials at the Italian port of Trieste say one reason is higher insurance premiums.

And companies have to switch ships during the journey to conceal their identity to reduce the risk of being attacked, adding another financial burden.

A shipping industry official in Italy said, "Commercially it is a disaster. Unfortunately the cost may increase even more."

Japanese companies are also being affected.
Suzuki Motor suspended operations at a plant in Hungary for seven days this month, citing a delay in the arrival of parts from Japan.

Goto Hiromasa, a researcher at Japan Maritime Center, said as the attacks continue, so too will the disruption to the global supply chain.

Goto said, "Even if the situation improves and the Red Sea route becomes safe to travel through again, it would take a certain period of time for shipping companies to get back to the original Suez Canal route."

Still, he said the situation will not have a major impact on Japanese business as the country imports oil and other resources from other parts of the Middle East or North America.