Red Sea attacks see exporters turn to China-Europe Railway Express ahead of Lunar New Year

Global supply chains are currently facing significant disruptions due to the actions of the Houthi rebels in the Red Sea. These Iranian-backed rebels, who control a substantial portion of Yemen, including most of the Red Sea coast, have been utilizing exploding drones and missiles to attack commercial vessels traversing this crucial trade route. Their actions are a form of protest against Israel's military operations in Gaza.

Major shipping lines such as the Danish shipping giant Maersk, Chinese state-owned shipping company Cosco, and energy behemoth BP have been compelled to cease using the Suez Canal and Red Sea route due to these attacks. The situation is anticipated to deteriorate further with the approaching Lunar New Year, a period during which China, often referred to as the world's factory, produces a significant amount of goods for export before factories shut down for the annual holiday. However, with ships being halted or rerouted around the Cape of Good Hope, many are not expected to arrive at Chinese ports in time.

The Suez Canal, the shortest shipping route between Europe and Asia, is one of the world's busiest waterways. It accounts for 12 per cent of global trade, including 30 per cent of all container movement. However, the need to divert around the South African seaboard adds an extra 3,500 nautical miles to a ship's voyage, potentially extending the journey by up to two weeks. This will result in a delay in the return of empty containers to China, causing a ripple effect that will be felt globally.