(MENAFN- Daily News Egypt)
The Egyptian International Freight Forwarding Association (EIFFA) at the Cairo Chamber of Commerce warned of the economic consequences and the surge in shipping costs, which will impact the prices of various goods and the stability of markets if the tensions in the Red Sea persist due to Houthi attacks on ships passing through the Red Sea. As a result, ships had to change their route and cross the Cape of Good Hope route, which increased the additional costs of the trip around the Cape of Good Hope by up to $1m in fuel for each round trip.
The cost of shipping imports through the Bab al-Mandab Strait rose by up to 170% due to Houthi attacks on ships affiliated with Israel and the United States, which led shipping companies to halt all their flights through the strait as well.
Moreover, the diversion of ships from the Suez Canal waterway to the Cape of Good Hope, in the far south of Africa, extended the journey between Asia and Europe by about 10-15 days, and doubled the cost of transportation, he revealed.
Al-Samdouni said:“We started to be affected by the events in the Red Sea since the beginning of January, as companies with container ships and car transport ships switched to the Cape of Good Hope route instead of passing through the Red Sea and the Suez Canal. This also affects Egypt's foreign exchange reserves, as the Suez Canal is a major source of foreign currency, which Egypt lacks.”
He added that traffic fees through the Suez Canal account for about 8% of the Egyptian government's revenues, and provide a large portion of the country's foreign currency revenues.
He concluded:“There are indirect effects, such as increases in the prices of basic goods and materials, especially those that are imported from abroad, due to higher costs in origin and shipping, and increased risk insurance costs or change of destination.”
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