"Red Sea Conflict Sparks Air Freight Surge and Trade Concerns for Major Retailers and Auto Companies"
The Houthi rebel attacks in the Red Sea have led to significant diversions for ocean cargo vessels, causing a surge in air freight volumes and raising concerns among retailers and auto companies. Companies are turning to air freight to avoid longer diversions around Africa's Cape of Good Hope, leading to a spike in demand and potential cost increases. The crisis has heightened fears of supply chain inflation, with comparisons being made to pandemic supply chain shocks. Major retailers and auto companies are already experiencing manufacturing impacts, and logistics managers are favoring the Suez Canal for its faster route from Southeast Asia to Europe and the U.S. East Coast.