Rouzer, Supply Chain Caucus Press Biden Administration on Efforts to Protect Global Supply Chain Amid Houthi Attacks

WASHINGTON, Jan. 31 -- Rep. David Rouzer, R-North Carolina, issued the following news release on Jan. 30, 2024:

Today, the bipartisan Supply Chain Caucus led by Congressman David Rouzer (R-NC), Congressman Dusty Johnson (R-SD), Congressman Colin Allred (D-TX), and Congresswoman Angie Craig (D-MN) sent a letter to the Biden Administration expressing concern with the ongoing Houthi attacks in the Red Sea disrupting global shipping routes, threatening supply chains, and endangering human life.

The letter is being sent to U.S. Defense Secretary Austin, State Department Secretary Blinken, and Transportation Secretary Buttigieg requesting continued efforts and oversight to secure the Red Sea shipping lanes and restore the safe passage of trade in the region.

The Members wrote, "The world has witnessed how detrimental disruptions to the global shipping market can be on supply chains. The COVID pandemic bottlenecks resulted in record shipping container backlogs and wait times at ports. Further, repeat blockages of the Suez Canal showed how vital the Red Sea passage is for international trade and functioning supply chains."

The Members further emphasized, "In recent weeks, attacks by Houthi rebels on commercial ships have resulted in major ocean carriers diverting routes through the Red Sea and instead sailing around the Cape of Good Hope. These attacks, conducted by pirates and supported by the Iranian powerhouse, are out of revenge for Western support for Israel. We cannot allow these bad actors to punish our nation and cripple our supply chain without swift recourse."

The Members also cited reports stating approximately twenty percent of all container shipping passes through the Red Sea and Suez Canal, making any disruptions in the region of particular concern. Rerouting ships also results in lengthier shipping times, further exacerbating delays.

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To: The Honorable Lloyd J. Austin III, Secretary, U.S. Department of Defense, 1000 Defense Pentagon, Washington, D.C. 20301

The Honorable Pete Buttigieg, Secretary, U.S. Department of Transportation, 1200 New Jersey Avenue, S.E., Washington, D.C. 20590

The Honorable Antony Blinken, Secretary, U.S. Department of State, 2201 C Street, N.W., Washington, D.C. 20520

Dear Secretaries:

We write to share our concern with the ongoing Houthi attacks in the Red Sea that are disrupting global shipping routes and threatening supply chains.

The world has witnessed how detrimental disruptions to the global shipping market can be on supply chains. The COVID pandemic bottlenecks resulted in record shipping container backlogs and wait times at ports. Further, repeat blockages of the Suez Canal showed how vital the Red Sea passage is for international trade and functioning supply chains.

In recent weeks, attacks by Houthi rebels on commercial ships have resulted in major ocean carriers diverting routes through the Red Sea and instead sailing around the Cape of Good Hope. These attacks, conducted by pirates and supported by the Iranian powerhouse, are out of revenge for Western support for Israel. We cannot allow these bad actors to punish our nation and cripple our supply chain without swift recourse.

While the Biden Administration has taken action to confront these attacks, violence and disruption persists.

Approximately 20 percent of all container shipping passes through the Red Sea and Suez Canal, making any disruptions in that region of particular concern to shippers and customers alike./1 Rerouting ships also results in lengthier shipping times - 10 days of travel time on average - further exacerbating delays./2

Cost escalation is a major concern. Avoiding the Red Sea can cost an additional $1 million in fuel per round trip, while insurance premiums have spiked for ships traveling through the conflict zone./3 This has begun to affect shippers as rates from Asia to Europe have nearly doubled, while freight rates for US-bound cargo spiked in recent weeks./4

The Federal Maritime Commission has the authority to accept Special Permission requests, allowing common carriers to expedite shipping rate increases through surcharges and additional fees. We urge the Commission to ensure any rate increases are reasonable, targeted, and transparent to all affected parties. The Commission should use their oversight authority to prohibit bad actors from taking advantage of the current situation to unnecessarily inflate rates. We look forward to the Commission's February 7th hearing to continue this discussion.

As Members who focus on supply chain resiliency and efficiency, we ask for your continued efforts and oversight to secure the Red Sea shipping lanes and restore the safe passage of trade in the region.

Sincerely,

Dusty Johnson

Member of Congress

David Rouzer

Member of Congress

Colin Z. Allred

Member of Congress

Angie Craig

Member of Congress

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Footnotes:

1/ https://www.atlanticcouncil.org/blogs/econographics/the-long-shadow-of-the-red-sea-shipping-disruption/ #:~:text=The%20Red%20Sea%20is%20one,and%208%20percent%20of%20LNG.