In a letter addressed to Belgium's foreign minister, Eurocommerce, the European retail industry representative, has appealed to EU institutions and member states for a prompt resolution to the Red Sea crisis, reported Reuters on Friday.
The letter emphasized the "massive impacts" already felt by businesses. The escalation of Houthi militant attacks in the Red Sea has led shipping companies to redirect container vessels, impacting supply chains for industries reliant on the Suez Canal for shipping goods from Asia to Europe.
Several affected Eurocommerce members include supermarket giants Ahold Delhaize, Carrefour, Lidl, M&S, and Tesco, and 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," Eurocommerce said in the letter.
What does this mean for EU business?
Facing delays and cost increases, retailers sourcing from factories in China and Southeast Asia are dealing with the consequences of the alternative shipping route around Africa's southern tip, which takes 2-3 weeks longer and leads to higher fuel and labor expenses.
Fears are mounting that the disruption will extend the timeline for inflation to subside in Europe, especially as budget-conscious consumers anticipated a reduction in food and clothing costs.
"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.
The group has expressed support for EU initiatives focused on protecting commercial ships and seafarers against attacks.
The launch of an EU joint naval mission in the Red Sea is scheduled for this month.
What prompted the attack on shipping?
Since November, the Iranian-backed Houthis have allegedly launched at least 34 attacks on shipping through the waterways leading up to Egypt's Suez Canal.
The canal serves as a vital route for energy and cargo coming from Asia and the Middle East onward to Europe. The rebels, who have been at war with a Saudi-led coalition backing Yemen's exiled government since 2015, link their attacks to the Israel-Hamas war.
