As attacks have continued, and even escalated, in the Red Sea against commercial vessel by Yemeni Houthi rebels, shipping companies are beginning to send their trade through different, longer routes to avoid the region altogether. This could see the rise in shipping costs and delays in shipping, which will affect the overall world markets in significant ways if the threat is not removed.
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A mounting number of attacks by Yemen’s Houthi rebels on ships in the Red Sea amid the Israel-Hamas conflict is raising concerns about the impact on global trade — including in Canada.
Two of the world’s largest shipping companies, Maersk and Hapag-Lloyd, said Friday they were pausing operations in the critical trade route. That could lead to a domino effect on goods passing through the Red Sea, where about 10 per cent of the world’s trade flows through.
Although Canada doesn’t directly operate any cargo vessels in the Red Sea, the domestic shipping industry has direct relationships with those companies and others that bring goods to and from world markets.
“Any major disruption to trade flows in that area could have a downstream effect on the movement on goods to and from Canada in the future,” said Chris Hall, president and CEO of the Shipping Federation of Canada.