YemenEXtra
YemenExtra

Growing impact of Yemeni naval operations on US economy

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American economic losses continue to mount as Yemeni naval operations escalate and expand. This situation is causing significant setbacks for the commercial and industrial sectors within the United States. There are clear expressions of inflation concern, slowing economic growth, and rapidly escalating impacts similar to the COVID-19 pandemic on shipping. These concerns stem from rising transportation and insurance costs and persistent delays in the delivery of goods and raw materials. The evident failure of Washington to curb Yemeni operations leaves the cessation of genocide in Gaza as the only viable solution.
In recent days, numerous American media outlets have voiced concerns from the US shipping sector about heading towards a crisis akin to the COVID-19 pandemic. Container shipping costs from China to the US have surged to $8,000 per container, quadruple the cost from last December.

According to Freightos, a shipping data platform, prices are expected to soon reach $9,000. Experts and observers agree that these prices will continue to rise unless Yemeni attacks cease. This escalation could quickly bring shipping costs to pandemic-era levels of $15,000 to $20,000 per container.

The problem extends beyond transportation costs. Reports indicate significant delays caused by rerouting ships bound for the United States, resulting in major production disruptions due to the unavailability of raw materials. These disruptions affect various aspects of commercial activity.

The impact has intensified following the sinking of the ship Tutor, targeted by Yemeni Armed Forces earlier this month due to its owner’s violation of the ban on accessing occupied Palestinian ports. This incident also doubled insurance costs for ships, increasing from 0.3% to over 0.6% of the ship’s value. Many insurance companies now refuse to cover ships associated with the US, Israel, and the UK.

A report by the American banking institution US Bancorp stated that Yemeni Armed Forces’ attacks in the Red Sea had the greatest impact on the supply chain in the first quarter of this year. The report noted a slowdown in US economic growth to an annual rate of 1.3%, down from 2.5% last year.

The report expressed concerns that continued Yemeni attacks would further increase shipping costs, potentially causing inflationary effects. Rob Haworth, Senior Investment Strategy Director at US Bank Wealth Management, mentioned, “We have not yet reached the same point we were during the peak of supply chain issues a few years ago (during the pandemic), but there are some risks,” indicating that “if demand suddenly rises, increased production may be necessary.”

The report highlighted broader supply chain issues, with some companies struggling to meet demand, acquire necessary components, or find sufficient labor for production. Additionally, transport challenges have arisen, including increased shipping traffic at certain ports and a shortage of truck drivers for long-haul deliveries.

Tom Heinlein, National Investment Strategist at US Bank, stated that “rising inflation reflects constrained supply of goods at a time when there is strong demand for many of those same goods.”

According to a report by the Australian site Wood Central, Red Sea attacks have affected $50.8 billion worth of American goods.

These impacts and declared concerns indicate that the ongoing genocide in Gaza, and consequently the continued and escalating Yemeni operations, will cause the American economy to bleed further at an uncontrollable level, even from a media standpoint. The increased intensity of Yemeni strikes and the introduction of powerful destructive weapons like unmanned boats could rapidly drive US shipping and insurance costs back to pandemic-era levels, with additional impacts.

Since the onset of the Al-Aqsa Storm battle and the Zionist aggression on Gaza, the Yemeni Armed Forces have imposed a ban on ships linked to the Zionist entity. Hundreds of operations have been conducted against these ships and American and British military assets by ballistic, naval, and drone missiles.