“The intensification of attacks by the Yemeni Houthi group on ships entering the Red Sea has recently led to a suspension of transit in the Canal by the major international shipping companies”. This was said by the general director of Confindustria, Raffaele Langella, during his hearing in the Foreign Affairs Commission on the methods of collaboration between Italy and the states of the continent African aimed at promoting development.
“The economic impact of the collapse of shipping through the Suez Canal will be strongly affected by its persistence. If the crisis is long, the negative effects on Italian and global foreign trade will be greater – said Langella – I am now considering the Italian case, but the situation is common to many countries in the Mediterranean basin”.
Africa, he noted, “is home to important maritime trade routes. Its coastal regions, including the Gulf of Guinea, the Red Sea and the Cape of Good Hope, serve as key maritime trade routes. These routes are crucial to the shipping of goods between continents, facilitating international trade and commerce. Furthermore, the proximity to the Suez Canal represents a significant advantage. Every year, 12% of world trade passes through this canal.”
The stability of the area, underlined the general director of Confindustria, “is directly linked to the security of maritime routes, vital arteries for the transport of goods. The intensification of attacks by the Yemeni Houthi group on ships entering the Red Sea has recently resulted in a suspension of transit in the Canal by the major international shipping companies (MSC, Maersk, CMA CGM, Hapag-Lloyd, followed by oil companies such as British Petroleum and Frontline), which diverted the routes south of the Cape of Good Hope (about 10 days of navigation more). By mid-January, ship traffic in the Red Sea had more than halved (-55% compared to the 4th quarter of 2023; Redsea Kiel institute data) and the cost of transporting containers from Asia to Europe increased by 92% (Shanghai Containerized Freight index)”.
The repercussions
It's a situation, Langella noted, “that goes through supply chains it can also have repercussions on apparently less exposed industries and economies. It is worth remembering that 90% of global trade volume takes place by sea; the Mediterranean represents 20% of world trade; for Italy, 54% of trade takes place by ship (40% through Suez); over 90% of Italian flows with the main countries east of the Red Sea (Asia and the Middle East) pass by sea. The oil and gas trade is particularly exposed (from Kuwait, Qatar, United Arab Emirates, Iraq); electronic products and household appliances (more than half of non-EU imports come from China); leather products (almost a third comes from China); machinery (especially those exported to the main Asian countries); the import and export of agricultural products (including olive oil, wine, fruit and vegetables) and the fishing industry”.
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