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Red Sea Attacks Send Shockwaves Through Global Trading

The Red Sea, a crucial maritime route connecting Europe, Asia, and Africa, is currently under siege as attacks on commercial vessels by the Houthi group create ripples throughout the global shipping industry. The ramifications of these assaults are being keenly felt by businesses worldwide with increased shipping costs, disruptions in supply chains, and potential delays in product availability. In this article, we delve into the details of how these attacks are impacting companies, particularly focusing on the experiences of Thomas O’Brien, CEO of Boxer Gifts, and others in the business community.

The Realities of Global Shipping for Boxer Gifts

Thomas O’Brien, head of Boxer Gifts, a Leeds-based company specializing in designing games and seasonal presents, opens up about the stark realities his business faces. With products manufactured in China, Boxer Gifts heavily relies on global shipping, making it vulnerable to the disruptions caused by the Red Sea attacks. O’Brien reveals that the shipping costs for his company have skyrocketed by an alarming 250% in the past two weeks, a consequence of shipping companies diverting vessels away from the troubled waters.

The Domino Effect on Prices and Delays

O’Brien isn’t alone in grappling with the aftermath of the Red Sea attacks. The British Retail Consortium (BRC) issues a warning about potential delays and price increases across various industries. Helen Dickinson, CEO of BRC, attributes this to higher transportation and shipping insurance costs. O’Brien sheds light on the double blow his company faces, as not only are the increased costs a concern, but delays of 10 to 14 days are becoming the new norm. With Valentine’s Day and Mother’s Day products at risk of missing their respective occasions, the domino effect on businesses is evident.

Red Sea Global Shipping Giants Altering Courses

Several major shipping companies, including the likes of Mediterranean Shipping Company and Maersk, respond to the threat by diverting vessels away from the Red Sea, opting for a longer route around Africa’s Cape of Good Hope. The German shipping giant Hapag-Lloyd, which sends an average of 50 ships a month through the Suez Canal, announces its commitment to avoiding the Red Sea route until at least 9 January. This diversion comes at a significant cost, affecting both shipping frequencies and the overall efficiency of supply chains.

The Forecast for Global Trade in Red Sea

While the International Chamber of Shipping’s Secretary General, Guy Platten, warns that the true impact may not be felt until later in January, the immediate consequences are already visible. The disruption to supply chains has led to increased costs for businesses. Rachael Waring, who runs a furniture business, highlights the financial strain caused by a diverted container, with costs tripling and an anticipated rise in product prices.

The Financial and Reputation Fallout

Thomas O’Brien emphasizes the potential financial hit his company could face, amounting to hundreds of thousands of pounds. However, he underscores that his primary concern lies in maintaining the trust of customers, as reputational damage can linger far beyond the immediate financial strain. Other business owners, like Rachael Waring, echo this sentiment, emphasizing the knock-on effects on cash flow, customer satisfaction, and the broader economic landscape.

Future Outlook and Cost Considerations

As businesses grapple with the immediate challenges, Peter Sand, Chief Analyst at shipping analytics platform Xeneta, provides insight into the future outlook. While acknowledging the necessity of covering increased costs due to the route diversion, he emphasizes that such charges should not become permanent fixtures. The hope is that as the threat to shipping subsides, businesses can revert to more cost-effective and efficient routes, mitigating the long-term impact on global trade.


The Red Sea attacks have thrust the global shipping industry into uncharted waters, with businesses facing unprecedented challenges in terms of increased costs, supply chain disruptions, and potential delays. As companies adapt to alternative routes and brace for the financial implications, the true extent of the impact on global trade remains to be seen. The resilience of businesses and the ability of the shipping industry to navigate these challenges will play a crucial role in shaping the future of international commerce in the aftermath of the Red Sea attacks.

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