Attacks on ships in the Red Sea will cause global inflation to surge

- International analysts warn

Attacks on ships in the Red Sea will cause global inflation to surge

New York – In the coming times, the attacks on merchant ships in crucial sea areas, like the Red Sea, would disrupt the entire world’s trade. International analysts have warned that this will lead to a new spike in inflation. Besides, some analysts say that if this inflation happens, it will first affect the people of Western countries. Meanwhile, due to the suspension of cargo ships in the Red Sea, freight rates have jumped to 53%. At the same time, demand for transporting heavy cargo ships for longer distances has increased, and the cost of a 40-feet container rose to $10,000 from $2,400 last week.

Attacks on merchant ships in the Red Sea will cause rising inflation in the worldMoreover, the Red Sea is considered a region connecting Asia-Gulf and European countries with trade routes. Ships transporting fuel and cargo from Asia-Gulf countries must pass through the Red Sea through Egypt’s Suez Canal before reaching the Mediterranean Sea. The narrow maritime zone between Yemen, Saudi Arabia, Egypt and Sudan accounts for 12% of the world’s trade traffic. Therefore, the security and stability of the Red Sea are of great importance, and the navies of all the world’s major countries have been deployed to protect their interests in this region.

However, tensions have increased over the past two months, with Yemen’s Houthi terrorists continuing to attack a cargo ship and a fuel tanker travelling through this maritime region. Since October, Houthi terrorists have carried out 100 attacks in the marine area and targeted ten foreign vessels. Houthis have also hijacked one of these ships. The ship has been docked in Yemen’s port since last month. In addition, MSCS, Maersk, Attacks on merchant ships in the Red Sea will cause rising inflation in the worldHapag-Lloyd and British fuel companies have suspended their traffic due to these attacks on foreign ships in the Red Sea and Strait of Bab-al-Mandeb. Instead, these companies have now dispatched their heavy ships via South Africa.

Nonetheless, international analysts say this will not be an option. It will take 14 days more to reach Europe via South Africa’s Cape of Good Hope, increasing the costs and insurance of cargo ships. Also, the overall impact will be on the cost of the goods in the ship, which will soon lead to a spike in inflation, warned Rob Handfield, Professor of Supply Chain Management at North Carolina State University.

Furthermore, the tension in the Red Sea has continued for two months. There is little chance of finding a solution in the coming times. Due to this, if the current situation persists, the prices of fuel, as well as electronics, and other goods will likely increase very quickly. Additionally, another analyst named Jason Miller has also expressed the possibility of a surge in inflation in these Western countries in the coming days due to the dependence of Europeans on imports from India and Vietnam along with the Gulf countries.



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