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12 Feb, 2024 05:39

Shipping giant issues warning over global supply chain

Disruptions in the Red Sea could last for up to a year, according to Japan’s Mitsui OSK Lines
Shipping giant issues warning over global supply chain

The disruptions to global supply chains caused by the ongoing tensions in the Red Sea could last for a year, Japanese shipping giant Mitsui OSK Lines (MOL) has warned.

Major players in the shipping industry, including MOL, have temporarily stopped using the Suez Canal, a critical maritime trade route connecting the Mediterranean Sea to the Red Sea and a vital sea lane for energy and cargo between Asia and Europe. This followed dozens of drone and missile attacks carried out by the Yemen-based Houthi rebels in the Red Sea since the beginning of the Israel-Hamas war in October.

“It’s a historic event,” MOL President Takeshi Hashimoto said in an interview with Bloomberg, referring to the transit halt by shipping operators.

“The situation will continue at least for the coming two or three months. And as a worst-case scenario, six months or one year,” he noted. MOL is one of the world’s largest ship operators with a fleet of around 800 vessels.

There are currently enough ships available to weather the disruption, according to Hashimoto. However, if the global economy were to suddenly grow and demand for goods increased, there would be a shortage of shipping capacity, he warned.

Freight through the Suez Canal has been plummeting since the Houthi attacks forced shipping companies to divert shipments, sending shockwaves through global supply chains. On Tuesday morning, Houthi rebels fired projectiles at two commercial vessels, striking one of them.

For more stories on economy & finance visit RT’s business section

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