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How Canadian shippers are feeling the strain of the Red Sea conflict

The price of oil jumped on news that U.S. and British warplanes launched strikes against Houthi targets in Yemen, marking a significant escalation of conflict and tension that has been building in the area. Shipping costs continue to soar as commercial vessels are diverted away from the area, adding to production delays as well as fuel and labour costs. And the list of disrupted companies continues to grow, including Ikea, BP, Tesla, Volvo, Abercrombie and Crocs. Anne Gaviola has more on the current — and expected — impact on supply chains and inflation across North America – Jan 12, 2024

Canadian shippers are starting to feel the strain of attacks on cargo vessels in the Red Sea, as container rates rise and boats are late to arrive.

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Port data shows that two-thirds of the 43 ships slated to berth at the Port of Halifax in the second half of this month are now expected to arrive at least a day behind schedule, with some running weeks late.

According to industry research firm Drewry, the average price of shipping containers has doubled since mid-December, when Houthi militants in Yemen stepped up attacks on commercial boats to protest against Israel’s military campaign in the Gaza Strip.

The widening conflict has prompted all major container carriers to steer clear of the route that passes through the Suez Canal, opting instead for a path around Africa that can add one to two weeks to transit times and greater fuel, crew and insurance costs.

Shipping Federation of Canada CEO Chris Hall says the delays have sent importers scrambling, with sluggish stock still en route to Canadian shores and shelves.

But shipments to the West Coast remain largely unaffected so far, while the Global Shippers Forum says excess capacity in the sector means prices will likely settle far below pandemic highs.

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