Red Sea Attacks Resume, Putting Retailer Supply Chains Back on Alert

Quick Facts

Houthi attacks have reduced Suez Canal commercial transits from over 26,000 ships in 2023 to 13,200 in 2024, cutting daily cargo volume by nearly 58%.
Freight rates on Asia-Europe routes surged fivefold in 2024, with the Shanghai Containerised Freight Index averaging 149% above 2023 levels.
Rerouting around Africa’s Cape of Good Hope adds 7,000-plus nautical miles and 10 to 15 days per voyage, raising per-TEU costs by $200 to $400.

Houthi rebels in Yemen have resumed attacks on commercial ships in the Red Sea, pushing freight costs higher and forcing brands to make hard calls on routing, inventory, and air freight budgets. The renewed threat arrives as many retailers had hoped the worst disruptions were behind them.

The Houthis began targeting vessels in November 2023, citing solidarity with Palestinians in Gaza. Since then, they have launched more than 190 attacks, diverting over $80 billion in cargo and triggering the largest sustained disruption to global shipping in decades.

Roughly 12% of all global trade passes through the Suez Canal each year, amounting to approximately $1 trillion in goods. The renewed attacks risk undoing any recovery in that corridor.

What Happened to Freight Rates

Between November 2023 and March 2024, global container shipping rates rose roughly 130%, reaching $3,964 per 40-foot container on the Drewry Global Container Index by late January 2024. As of November 2024, the Drewry World Container Index remained 141% above pre-crisis levels.

War-risk insurance premiums, once under 0.1% of vessel value, climbed to between 0.7% and 1% by mid-2025. For a $90 million very large crude carrier, that added $360,000 per voyage, a 500% increase from 2024 levels.

The Suez Canal Authority reported annual revenue fell to $7.2 billion for the 2023-24 financial year, down from $9.4 billion the year prior. The port of Eilat in Israel declared bankruptcy in July 2024 after activity dropped 85%.

How Brands Are Responding

Major retailers have taken different approaches to absorb the disruption. H&M CEO Daniel Erver said the company made short-term adjustments to offset delays. Inditex, parent of Zara, reported average delays of about one week as it reroutes ships away from the Suez Canal. Abercrombie told suppliers it would shift to air freight to avoid delays.

Electrolux, the world’s largest appliance company, formed a task force to identify alternate routes after disruptions hit its carriers, including Maersk and CMA CGM.

Dr. Sheng Lu, a professor of apparel studies at the University of Delaware, warned that the crisis would continue to raise shipping and insurance costs, delay shipments, and squeeze margins for fashion companies and manufacturers. He noted that millions of daily EU apparel imports from Asia face disruption with limited short-term alternatives.

What It Means for DTC and Retail Operators

Brands that locked in freight contracts early in 2024 got some protection. Georgina Johanan, head of European general retail at J.P. Morgan, noted that most retailers within J.P. Morgan’s coverage had hedged freight exposure and locked in rates for at least the first half of 2024. But she cautioned that upward renegotiations remained possible if conditions worsened.

The Cape of Good Hope detour now adds up to 40% more fuel consumption per voyage and extends Asia-Europe transit times from roughly 25 days to nearly two months. Those delays translate directly into inventory planning problems, missed seasonal windows, and higher landed costs.

For DTC brands with lean inventory models or tight product launch calendars, the math gets difficult fast. Air freight shifts cut delay risk but erode margins. Sitting on more safety stock ties up working capital. Neither option is painless.

With attacks continuing into mid-2026, operators should treat elevated freight costs and extended lead times as a baseline assumption rather than a temporary disruption.