The first repercussions of the military escalation in the Red Sea between Westerners and the Houthis of Yemen are being felt on industrial activity in Europe, and first of all on the automobile sector. Thus, Tesla announced, Thursday January 11, the suspension of production of electric vehicles in its German factory between January 29 and February 11, due to a shortage of components manufactured in Asia. “The considerable increase in transport times is creating a gap in supply chains”explains the American manufacturer.
The next day, the Swedish Volvo, owned by the Chinese Geely, mentioned a three-day shutdown, the week of January 15, at its Belgian factory in Ghent due to a lack of gearboxes. Geely, like furniture manufacturer Ikea, warned its customers of a delay in deliveries. Longer delivery times and possible port congestion will penalize other companies downstream in the supply chain.
Since November 2023, US Central Command in the Middle East has recorded twenty-seven attacks by drones, missiles, and even a ballistic missile. Fewer and fewer ships are using the Red Sea and the Suez Canal, which normally sees 12% of international trade and a good portion of containers bound for Europe.
“Inflationary pressure”
The four major European shipowners (MSC, Maersk, CMA CGM and Hapag-Lloyd), which provide 53% of global transport by “boxes”, are now avoiding the perilous Bab Al-Mandab Strait, at the entrance to the Red Sea, and divert their container ships by the Cape of Good Hope. Twice as many ships as at the end of November are crossing the tip of Africa, extending the Asia-Europe journey by 13,000 kilometers and its duration by a good ten days. Many goods will take longer before being unloaded in Rotterdam (Netherlands), Antwerp (Belgium), Marseille (Bouches-du-Rhône) or Genoa (Italy).
Now, 90% of container ships avoid the Egyptian isthmus, according to Clarksons Research Services, a subsidiary of the world’s largest shipping broker. This diversion led to a 40% drop in revenues for Egypt, which owns the canal. The crisis caused a drop in trade flows, estimated at -1.3% globally, between November and December 2023, by the Institute of World Economy in Kiel (Germany), and it reached 2% and 3% respectively. .1% for exports and imports between Asia and Europe.
You have 60% of this article left to read. The rest is reserved for subscribers.