2024-11-10 13:14:00
Houthi pirate attacks in the Red Sea are disrupting maritime trade and having direct consequences on prices in Europe. In Belgium, even the funfair is feeling the effects, with an unexpected price increase on traditional duck fishing
Attacks by Houthi pirates, who have been targeting merchant ships in the Red Sea for several months, are starting to weigh heavily on the Belgian budget.
These actions are disrupting the supply chain, significantly increasing transportation costs for many products imported from Asia.
While going to the Liège fair, our team noticed it. The price of an essential game of this place has increased: duck fishing.
An increase due to diverted routes
Anthony Mastrovalerio, Walloon president of the Union of Belgian fairground industrialists, confirms this unexpected consequence: “The problem is the Houthi pirates who attack the boats carrying our goods in the Red Sea“.
In fact, these attacks force carriers to lengthen their routes. “These attacks have led many large maritime operators to divert their usual routes.“, explains Didier Van Caillie, professor of business strategy at the University of Liège.
Thousands of cargo ships and tankers that once passed through the Suez Canal must now bypass all of Africa. A three-week detour which involves an increase in prices, in one month the cost of the container has doubled.
Bulky products impacted as a priority
This lengthening of the road has repercussions on bulky goods, which are particularly expensive to transport. Thierry Pauwels, toy wholesaler, notes that certain items are no longer profitable: “For example, for large stuffed animals, we put less in a container and then the price goes up. So we will be, in my opinion, on an increase of 25 to 30% for next year“.
Toys aren’t the only ones affected. Clothing, household appliances, furniture and automobile parts are also expected to increase by 10 to 35% in 2025, according to professional estimates.
For fairground operators, these successive increases complicate the management of their prices. Serge Wynands, showman, deplores the impact of this situation: “I can’t increase it too much now“.
After the Covid crisis and global supply problems, the consequences of the Houthi attacks are added to the economic challenges.
Belgium company Houthis economy
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**Interview with Didier Van Caillie, Professor of Business Strategy at the University of Liège**
**Editor:** Thank you for joining us today, Didier. We’re hearing a lot about how Houthi pirate attacks in the Red Sea are disrupting maritime trade. What exactly is the scope of this disruption?
**Didier Van Caillie:** Thank you for having me. The situation is quite serious. The attacks have forced many shipping companies to divert their routes. Instead of the typical passage through the Suez Canal, thousands of vessels are now making a lengthy detour around Africa. This change can add significant time—up to three weeks—to shipping schedules, greatly affecting the supply chain.
**Editor:** How is this affecting prices in Europe, specifically in Belgium?
**Didier Van Caillie:** In Belgium, the impact has been felt across various sectors. The increased transportation costs due to these longer routes are being passed down to consumers. For instance, even traditional festivities like the Liège fair are feeling the squeeze, evidenced by a notable rise in prices for games like duck fishing. This could be a direct result of inflated shipping costs for the goods supplied to these fairs.
**Editor:** You mentioned that bulkier products are impacted more severely. Could you elaborate on that?
**Didier Van Caillie:** Certainly. Bulky products generally have higher shipping costs because of their size and weight. When shipping routes change, these costs can spiral, leading to a doubling in the cost of containers over just a month. Retailers, in turn, are forced to raise prices to maintain their margins, which ultimately affects the consumer.
**Editor:** Given the ongoing piracy threat, what measures can businesses take to mitigate these impacts?
**Didier Van Caillie:** Businesses need to adapt their logistics strategies. This could mean finding alternative suppliers closer to home or utilizing different shipping methods that might be more resilient to such disruptions. Additionally, investing in inventory management to buffer against delays could help companies better manage their costs during these unpredictable times.
**Editor:** Thank you for your insights, Didier. It seems this issue extends beyond immediate maritime security and impacts everyday consumers.
**Didier Van Caillie:** Exactly. It’s a complex situation that underscores how interconnected our global economy is. The repercussions of these attacks ripple through to our local markets, something we all need to be aware of.
**Editor:** Thank you for your time and expertise.