Firms rush to avert disruption from Red Sea attacks

Global shipping rates rose sharply and companies scrambled to avoid disruption to shipments after attacks on vessels in the Red Sea on Tuesday stymied traffic through the key Suez Canal trade artery.

Recent attacks on vessels forced leading shipping companies including Maersk to reroute around the Cape of Good Hope to avoid the Suez Canal, the shortest shipping route between Europe and Asia.

The attacks have stirred memories of 2021 when the container ship Ever Given ran aground in the canal, blocking dozens of container ships for six days. The current disruption has caused container shipping costs to rise sharply, but those rates are still far below peak pandemic levels.

Electrolux, the world's largest appliance company, has set up a task force to find alternative routes or identify priority deliveries, while Inter IKEA warned of potential product shortages.

As of Tuesday, the price to ship a container from China to the Mediterranean was $2,413, having risen 44% in December due to the disruptions, after hitting a low of $1,371 earlier this year, said Eytan Buchman, chief marketing officer at Freightos, a booking and payments platform for international freight.

However, that rate still falls far short of the pandemic era high in January 2022 of $14,158, when shipments of goods were delayed by months due to lack of available container vessels. With worldwide economic demand softening, particularly in China, ship owners haven't been able to fill ships with containers. Electrolux said late on Monday that it expects any effect on deliveries will be limited. The Swedish group has worked with shipping companies such as Maersk and CMA.

In a statement on Tuesday, Inter IKEA said it was looking at alternative transportation options to the canal, a key route for the budget furniture maker. "The situation in the Suez Canal will result in delays and may cause availability constraints for certain IKEA products," it said.

The canal accounts for about 12% of the world's shipping traffic. Defense Secretary Lloyd Austin said on Tuesday the United States was leading a multinational operation to safeguard commerce in the Red Sea.