By Gemma Handy
Source Antigua Observer
Disruption to global shipping as cargo carriers avoid the Red Sea could fuel further price hikes and goods scarcities in Antigua and Barbuda within weeks.
That was the stark warning yesterday from local port bosses just days after a deeply unpopular hike in the sales tax ABST came into effect, forcing shoppers to dig even deeper when visiting supermarkets, restaurants and entertainment spots alike.
Attacks on ships in the Red Sea have seen freight firms bypass the vital waterway that connects major markets, instead taking the long route around South Africa’s Cape of Good Hope.
On Friday, the world’s biggest shipping company Maersk announced it was suspending all Red Sea routes for the “foreseeable future”.
Iranian-backed Houthi militants in Yemen have been firing on vessels in the Gulf region to show their support for Palestinian Islamist group Hamas fighting Israel in Gaza.
The result is a multiple-front storm for global trade which has pushed ocean freight rates even higher, triggering warnings of inflation and delayed goods worldwide.
Port Authority boss Darwin Telemaque said the situation was a “major source of concern” for all.
“Shipping prices have already started rising,” he told Observer. “The duration for which cargo would arrive from Asia to North America, South America and the Caribbean has been extended for a number of lines who have decided to avoid the Suez Canal.
“That extends shipping by over 35 days so you are literally watching cargo that would normally arrive within 30 days doubling, and maybe even more depending on the ports of call prior to arriving at the destination.”
Telemaque said the problems are being compounded by droughts in the Panama Canal – which serves as a crucial link between the Atlantic and Pacific oceans – reducing the number of ships that pass through there each day from around 36 to 18.
There are fears this number could diminish further still, sparking additional concerns for the impact on supply chains.
Telemaque warned increased fuel prices and scarcity of goods could be on the horizon for the twin island nation.
“If the situation persists and things remain as they are in the Red Sea, we could be impacted within the first quarter of 2024,” he said.
On the plus side, the Port Authority’s CEO said the timeframe gives local businesses a chance to prepare, by looking for “alternate suppliers, routes and regions”.
“It’s a good time to start looking around to see how you can maintain continuation of your supply chain. Regardless of whatever commodity you are trading in, it’s good to start looking around because the world seems to be heading towards a very serious situation over there in the Middle East,” he said.
Telemaque, who is also Vice-Chairman of the Inter–American Committee on Ports of the Organization of American States, has been involved in talks aimed at mitigating against potential problems.
A meeting of the body was held on Thursday with another due next week “to discuss what we see as the vulnerabilities that the situation can create and what we can do to advise and direct on strategy”, he explained.
Telemaque said it was vital that industry bodies were “responsive to escalating costs” around the world.
“One of the things we have to keep doing is ensuring that, as these challenges increase, we are doing all we can at our ports to ensure that we are more efficient, more productive and that we are delivering high quality, cost effective services to the business community that then serves the public,” he added.