Yemen's Houthi rebels, controlling most of the country, have thrown global trade into turmoil by attacking cargo ships and US warships in the Red Sea since October 2023. Claiming it as support for Palestinian Hamas, they've effectively shut down the Bab el-Mandeb Strait, a crucial chokepoint for Asia-Europe trade.

The fallout is significant:

• Major shipping lines abandon the Red Sea: With Bab el-Mandeb under Houthi control, major shipping companies are forced to detour around Africa, adding 25% to travel time and disrupting supply chains.

• Global supply chains in chaos: CEOs warn of "short-term chaos" leading to rising prices. Recalculating routes for 10,000-container ships requires immense logistical gymnastics.

• Panama Canal woes compound the problem: This vital shortcut is operating below capacity due to drought, further constraining options.

• Impact on businesses: Companies like Man & Machine face delayed deliveries due to rerouting and Panama Canal blockages. Their shipment might even need to cross the entire US to reach Maryland.

• Global trade ramifications: While businesses have built some resilience after COVID disruptions, prolonged Red Sea closure could push inflation up 2%, jeopardizing global inflation control efforts.

Key points to remember:

• The Red Sea carries 20% of container volume and 10% of global seaborne trade.

• Shipping costs from Asia to Europe have quadrupled since December 2023.

• Insurance premiums for daring Red Sea voyages have skyrocketed tenfold.

The crisis highlights the vulnerability of global trade to geopolitical disruptions and the interconnectedness of the world economy. A swift resolution is crucial to mitigate the long-term consequences, but the situation remains tense and could have significant implications for consumers and businesses worldwide.