Iran and Houthis drive up cost for Americans

 American Update:

Global shipping has been thrown into disarray by attacks from Iran-backed Houthi militants in the Red Sea, adding expenses and travel time to freight companies which will eventually be passed down to American consumers, according to experts who spoke to the Daily Caller News Foundation.

The number of weekly transits traveling through the Suez Canal and Red Sea has dropped 42% over the last two months, with the route typically being responsible for around 12% of global trade, according to the United Nations Conference on Trade and Development. Extra expenses due to the disruptions have led to higher shipping costs across multiple factors for freight companies, which will ultimately be passed down to consumers, leading to higher prices and greater inflation, experts told the DCNF.

“By any number of measures, avoiding the Red Sea has been costly to shippers,” Peter Earle, an economist at the American Institute for Economic Research, told the DCNF. “The initial attacks led to a spike in shipping insurance (in at least one case, by tenfold) and concerns about the safety of crews and equipment, which resulted in several carriers shifting to the route around the Cape of Good Hope. Others followed. Because that course is at least twice as long — 10,000 to 12,000 nautical miles versus 4,000 to 5,000 nautical miles — there are two other knock-on effects driving up costs.”

Many shipping companies are instead sending their routes around the Cape of Good Hope in South Africa, adding around ten days to travel times and requiring more fuel and greater labor expenses, according to Reuters. The resulting need for fuel is expected to add $1 million in extra expenses for every round trip between Asia and Northern Europe.

“First and most obvious, more fuel consumed, more crew time, more support required, etc.,” Earle told the DCNF. “The second is that with shipping containers spending longer on ships, certain ports have reported shortages, which drives up their prices on shipping exchanges… Those increases are hitting shippers, who are passing them on to manufacturers and other shippers and are on their way to consumer (end) prices — if they haven’t reached them already.”

Ships using the Red Sea also now need specialty war risk insurance, which has increased fiftyfold since the attacks began, now equating to around 0.7% to 1% of the value of the ship, according to The New York Times. Tankers carrying fuel are especially wary about traveling through the Red Sea due to the explosive nature of their cargo, threatening energy prices.

“A number of auto manufacturers, including Volvo and Tesla, have indicated that they will suspend production for anywhere from a few days to a few weeks in order to avoid having orders get backed up waiting for transport,” Earle told the DCNF. “If the disruptions continue, there will be a broad rise in prices at the consumer end for any good that has incurred substantially higher shipping costs.”
...

So far, the US has not made Iran pay a price for its part in threatening shipping in the Red Sea.  That is probably the only sound way to change things. 

See also:

Republicans Hit Biden for U.S. Military Deaths in Jordan: ‘He Left Our Troops as Sitting Ducks’

And:

 'Hell to Pay': How Will Biden Respond to Iran's Latest Attack?