Shipping traffic through the Suez Canal has almost halved since Yemen's Houthi rebels began attacking cargo ships in the Red Sea.
The main shipping corridor connects producers in the Asia-Pacific region and Western markets – and longer alternative routes have caused delays and increased costs.
In response to attacks by the Iran-backed militant group, which says it supports Palestinians in the country GazaImplemented by the United States and Britain Air strikes.
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The United Nations Conference on Trade and Development (UNCTAD), which supports developing countries in global trade, said the number of ships using the canal over the past two months fell by 39%, resulting in a 45% drop in shipping tonnage.
Jan Hoffmann, head of the agency's commercial logistics division, said there were now three major global trade routes disrupted, following the Russian invasion of Ukraine and the Panama Canal, where low water levels due to drought meant shipping last month fell by 36% year-on-year. And 62% two years ago.
“We are very concerned,” he said. “We are seeing delays, higher costs, and increased greenhouse gas emissions.”
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Pollution is on the rise because ships are choosing longer routes and also traveling faster to compensate for detours, he said.
The Suez Canal handles 12-15% of global trade and 25-30% of container traffic.
Container shipments through the canal fell by 82% in the week ending January 19 compared to early December.
Spot container rates recorded their largest weekly increase of $500 (£392), affecting not only shipments from Asia to Europe but also the non-Suez route to the US West Coast.
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However, rates have remained about half of their peak during the recession Covid-19 pandemic.
Food prices may feel the impact, Hoffman said, adding that about half of the increases seen since the war in Ukraine were due to higher transportation costs, although consumers in developed countries may take some time to see the impact.
“It takes time to pass on these high shipping rates to consumers, up to a year until … we actually see it in the store, any store — IKEA, Walmart or something like that,” he said.
