Unrest in the Middle East likely to have aftermarket price impact

January 12, 2024
Unrest in the Middle East likely to have aftermarket price impact A vast array of automotive components are sourced from China and other Eastern countries and are shipped to Europe by container ships sailing through the Red Sea and Suez Canal
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The European aftermarket is bracing itself for further rises in parts prices as disruption to shipping in the Red Sea, caused by Houthi rebels attacking commercial vessels is set to sharply increase shipping costs from Asia. 


A vast array of automotive components are sourced from China and other Eastern countries and are shipped to Europe by container ships sailing through the Red Sea and Suez Canal. Since Israel retaliated to Hamas attacks in the Gaza strip, the Iranian backed rebels have stepped up attacks on ships considered to be operated by allies of Israel, leading to conflict with US and UK warships. As such, many carriers now consider the Red Sea an unsafe area. 

Freight carriers are therefore faced with a choice of continuing to use the route, with added security and insurance costs, or reroute ships around South Africa. This adds 10-14 days to the journey time and has huge implications on fuel and other operating costs. 

The result of this is that the average cost of shipping a container from China to Europe has gone up from around $1200 in November to $4000 today. 

Added to this, rerouting ships can cause significant congestion at ports, adding to delivery delays. Analysts also say that conflict in the area will increase oil prices. Vehicle manufacturers will also be concerned that if the situation persists it could lead to a scarcity of both new vehicles and crucial components. 

The hope is that the situation will be contained and the current container shipping price surge can be kept in check. However, suppliers will have to take at least a short term hit and this will inevitably lead to prices rising. 
 
Unrest in the Middle East likely to have aftermarket price impact the average cost of shipping a container from China to Europe has gone up from around $1200 in November to $4000 today
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