The Six Choke Points That Can Upend Global Trade

By Alaric Nightingale – Bloomberg

Drone and missile attacks by Yemen’s Houthi militants on cargo ships traveling through the Red Sea—the shortest route between Europe and Asia—are a case in point. Most container ships are being rerouted around South Africa’s Cape of Good Hope, and shipping rates have soared as a result, complicating the task of central banks in Europe and the US that are in the difficult last mile of guiding inflation back to target. Fitch Ratings estimated in February that the trouble in the Red Sea was likely to increase prices of US imported goods by 3.5 percentage points by the end of 2024.