Unknown unknowns

The recent Red Sea after attacks by Houthi rebels are in geopolitics what Donald Rumsfeld, Secretary of Defence under the Ford and Bush junior administrations, famously called the “unknown unknowns”. The Suez canal handles about 12% of global trade. Rerouting shipments around the Cape of Good Hope adds about 3,000-3,500 nautical miles (6,000km) to journeys connecting Europe with Asia, adding about 10 days to the duration of the trip. The impact on traffic and freight costs was immediate. Unforeseen inflationary chocs like these happen and should not be underestimated.