"The cost of shipping a container from Shanghai to New York, for instance, has tripled this year," noted Tim Denoyer, senior analyst at ACT Research. A journey that cost $3,000 at the beginning of the year now commands $7,800—significantly impacting logistics chains worldwide.
A key contributing factor stems from the Red Sea, where Yemeni group Houthis are targeting Western commercial vessels in solidarity with Palestinians amid the Israel-Hamas conflict. "The Houthis are targeting nearly every Western commercial vessel attempting to transit the Suez Canal," Denoyer stated.
With ships now rerouting around South Africa instead of through the Suez Canal, the latter has seen a significant drop in revenue. This redirection adds additional costs for fuel, labor, and prolonged transit times, further exacerbating the global shipping price hike.