Ship traffic through the Suez Canal decreased by 30% in the first 11 days of the new year. Based on the number of attacks on shipping by Houthi fighters, that number will almost certainly increase. Some experts believe the US and UK navies cannot stop these Houthi terrorists. The alternative route many shipping companies have decided to use for safety takes them south of The Cape of Good Hope. This can add as much as $2 million in fuel costs per ship; the transit adds 3,100 miles to the Suez Canal route and can increase the shipping time by as much as ten days.
Among the most recent analyses of additional shipping days and costs is from Business Korea. One reason for the high fuel costs is that alternative fuels are unavailable. These biofuels are unavailable when ships refuel as they round the Good Hope. Shipping companies that want to reduce greenhouse gas emissions from their ships no longer have that option.
Statista reports annual international shipping emissions are about 700 million metric tons of carbon dioxide. This is 10% of all total global transportation carbon dioxide emissions. However, this number will increase if the Houthi attacks continue to prevent the use of the much shorter Suez Canal route. A few hundred ships forced to travel an additional few thousand miles are a tiny fraction of the global shipping traffic.
The Shipping Problem Could Worsen
However, the costs of diverting ships from the Suez Canal shipping route could grow for two reasons. The first is that the Suez Canal crisis could raise oil prices and, therefore, the cost of operating container ships and tankers. Second, the number of ships that need more fuel because they must avoid either the Suez Canal or the Panama Canal could rise rapidly.
Drought has cut the number of ships going through Panama by more than a third, and this drought is expected to worsen. A wider Middle East conflict will make travel to the Suez Canal more dangerous.