Shipping rates are in a serious upswing, gaining as much as 23% in a single week, as Yemen Houthi forces continue to target cargo ships passing through the Red Sea region. As the conflict appears to remain far from resolved, what does this mean for global trade and US consumers' wallets?

Wells Fargo Global Receivables & Trade Finance EVP Stephen Schwartz joins Yahoo to discuss the latest developments with the conflict in the Red Sea

"While we have not seen disruption in the Red Sea lead to material impact to US consumers today, we are continuing to monitor the situation closely and certainly the risk of impact increases the longer the disruption continues," Schwartz explains.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

JOSH LIPTON: Meanwhile, shipping rates skyrocketing amid ongoing attacks against commercial ships in the Red Sea, rising 23% in a single week as of January 18. Thus far, US airstrikes have not stopped Houthi forces in the region. What do these disruptions mean for consumers and prices? We're joined now by Stephen Schwartz, Wells Fargo Global Receivables Trade Finance EVP, the supply chain and global trade division of Wells Fargo.

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Stephen, it's good to see you. So the attacks continue, Stephen, the disruptions continue. We've seen this increase in shipping costs for companies, Stephen. Can you help us just kind of quantify that increase in shipping costs? Is it near now, Stephen, the rise we saw during COVID?

STEPHEN SCHWARTZ: Well, first off, thank you so much for having me today. The disruption in the Red Sea is leading to longer delivery times as a large percentage of the ships are continuing to avoid the region, which is certainly having an impact on global capacity. And it's really that impact on global capacity, which is impacting shipping costs, which have certainly spiked in the last two months, but they're really not anywhere near the levels that we saw at the height of the pandemic. So today we have seen impact really hitting Europe mostly around supply chain disruptions, but also impacts China as well given their export-reliant economy. But we haven't seen material impact in the US to date.

JULIE HYMAN: And do you think that we will start to, Stephen? I mean, it seems to me this has already gone on a little bit longer than some analysts might have predicted here or has been more severe. And so, at what point-- what's sort of the tipping point where we could start to see these higher costs as a result of this maybe spill over into higher costs for consumers or the wholesalers who are buying this stuff?