In a letter to Belgium’s foreign minister, the European retail sector association Eurocommerce stated that the Red Sea situation had already had “massive impacts” on businesses and urged EU institutions and member states to resolve it in order to restore trade.

In order to avoid the increasing frequency of Houthi militant strikes since early December, shipping companies have redirected container vessels away from the Red Sea. This has caused supply chain disruptions for businesses that depend on the Suez Canal to transport goods from Asia to Europe.

Supermarket behemoths Ahold Delhaize, Carrefour, Lidl, M&S, and Tesco are among the members of Eurocommerce, along with clothing merchants H&M, Inditex, and Primark.

“The longer carriers are forced to reroute, the more businesses, and ultimately consumers, will suffer from additional costs adding to the already high costs of living in Europe,” Eurocommerce said in the letter.

Because the alternate shipping route around Africa’s southern coast takes 2-3 weeks longer and results in higher fuel and labour charges, retailers that source from manufacturers in China and South-East Asia have experienced delays and cost increases.

Fears have been raised by this interruption that Europe’s inflation may take longer to abate, just when consumers on a tight budget were hoping that food and clothing prices would start to decline.

“Given the magnitude of the impacts on businesses and the global supply chain, we appeal for continued intensified and coordinated efforts by the EU institutions and Member States to address the situation,” Eurocommerce said.

The association declared its support for EU actions designed to defend sailors and commercial ships against assault. This month, the EU is scheduled to begin a joint naval mission in the Red Sea.

(Adapted from NewsWav.com)

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