It is bad enough when our shipping is affected by natural occurrences like drought in the Mississippi River and the Panama Canal. It puts a big obstacle in the shipping lanes and increases costs and shipping times. But when the problems are manmade, it becomes an even bigger headache.
As we know it takes a long time to get a ship around the southern tip of Africa between Europe and the Middle East. That is why we use the Suez Canal between the Red and Mediterranean Seas. Without having that artery, it takes an extra 10 days, even with today’s technology, to get a ship around Africa. The cost in fuel is astronomical, plus it slows down the shipment of vital goods.
Right now many companies are opting to go the long way around, rather than chance the Red Sea with increased pirating activity from Houthi militants. In fact, the second largest shipper in the world just announced they are going to bypass the Suez altogether. Danny Munch is an economist for the American Farm Bureau Federation, and he talks about the situation.
As we said, the expense of shipping around Africa is fuel and time. Two things that don’t sit well with today’s business climate.
Right now, the impact on Agriculture hasn’t been too harsh, but that could change the longer this piracy is allowed to continue.
