Eurocommerce, a European retail sector association, urged European Union institutions and member states to settle the Red Sea situation, which has interrupted trade, stating in a letter to Belgium’s foreign minister that it has already had “massive impacts” on businesses.
Shipping companies have moved container ships away from the Red Sea to avoid Houthi insurgent strikes, which have increased since early December, affecting supply lines for businesses that rely on the Suez Canal to transport goods from Asia to Europe.
Eurocommerce members include grocery giants Ahold Delhaize, Carrefour, Lidl, M&S, and Tesco, as well as fashion retailers 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,” the letter claimed.
Retailers sourcing from manufacturers in China and Southeast Asia have seen delays and cost rises since the alternative shipping route around Africa’s southern coast takes 2-3 weeks longer, resulting in increased fuel and manpower costs.
The interruption has sparked concerns that inflation in Europe may take longer to unravel, just as cash-strapped people were hoping that food and clothing costs would begin to fall.
“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 in a statement.
The association said it supported EU policies aimed at protecting commercial ships and mariners against assaults. The EU plans to undertake a coordinated Red Sea naval expedition this month.
