Christmas in Jeopardy as Houthi Attacks Send Shipping Costs Soaring

The ghost of the Christmas future looks bleak as retailers scramble to stock their shelves in the face of skyrocketing shipping costs and disruptions to global trade routes. The culprit? Houthi rebels in Yemen, who have been targeting ships in the Red Sea in a show of support for Hamas in its never-ending pissing contest with Israel.

Thanks to these trigger-happy rebels, the cost of shipping a 40-foot container has shot up to a staggering $4,000, a whopping 140% increase from last year. Nick Glynn, the head honcho of Buy It Direct group, which owns several online retailers, says this will hit consumers right where it hurts—in the wallet.

"It impacts cash and warehouse space as suddenly you have to store the goods for longer. You can't risk ordering later," Glynn explained. And if you were hoping to score a sweet deal on a new fridge or a fancy barbecue this holiday season, think again. Glynn says there's "no way" most online retailers can absorb these price hikes on big-ticket items, so "unfortunately for consumers, the next few months will see significant rises on these big-ticket items."

But it's not just the Houthi attacks that are causing retailers headaches. The pandemic has taught importers that the best way to protect their supply chains is to ship as much as possible as quickly as possible. Peter Sand, chief analyst at freight market tracker Xeneta, says some businesses are already shipping cargo for Christmas—in May.

To make matters worse, the attacks have forced ships travelling between Asia and Europe to take a longer route around Africa, adding even more time to their already lengthy journeys. Dominique Nadelhofer from sea logistics firm Kuehne + Nagel says that only around 50% of global container shipping is completed on time.

And as if all that wasn't bad enough, there are growing fears that as naval forces focus on countering the Houthi rebels, Somali pirates may seize the opportunity to ramp up their nefarious activities.

So, what does all this mean for the average consumer? Well, it's not looking good. Retailers are scrambling to place their Christmas orders early to ensure their shipments arrive on time, but the increased costs are likely to be passed on to shoppers in the form of higher prices.

Sue Terpilowski from the Chartered Institute of Logistics and Transport says companies realise that disruption to the Red Sea route could last until the autumn, so they're bringing forward their shipments to avoid "headlines 'Christmas is cancelled, there's nothing in the shops'."

It's a tough pill, but we might have to get used to a more expensive and less bountiful holiday season.

Thanks a lot, Houthi rebels. You've outdone yourselves this time.