Maersk, Hapag-Lloyd pause Red Sea shipping activity following attacks

Posted on 18 Dec 2023 by James Devonshire

Shipping giants Maersk and Hapag-Lloyd have paused their activity in a part of the Red Sea until further notice following a number of recent attacks on vessels.

Both companies have told all vessels scheduled to pass through the Bab al-Mandab Strait to pause their journeys until further notice. The Strait acts as a strategic link between the Indian Ocean and the Mediterranean Sea via the Red Sea and the Suez Canal. Approximately 10 to 12 per cent of global trade passes through the area, or more than 17,000 ships each year.

The news comes after several reports of Yemeni rebel attacks in the area. Iranian-backed Houthis set a Hapag-Lloyd containership ablaze during a series of missile attacks against box ships crossing the Red Sea on Friday. The Maersk Gibraltar was also targeted, with a missile just missing it while it was transiting near to Yemen.

“Following the near-miss incident involving Maersk Gibraltar yesterday and yet another attack on a container vessel today, we have instructed all Maersk vessels in the area bound to pass through the Bab al-Mandab Strait to pause their journey until further notice,” a Maersk spokesperson told Reuters on Friday.

Meanwhile, Hapag-Lloyd  said in a statement it is “interrupting all container ship traffic across the Red Sea until Monday”.

For manufacturers who rely on shipping for raw materials and components, the news comes at an already challenging time due to a severe drought in Panama which is expected to shift trade flows and push up freight costs

The Houti Rebels say they are targeting ships bound for Israel in response to the two-month-old war with Palestinian Hamas militants in the Gaza Strip.

The Unied States is being placed under increasing pressure from Israel to step in and help deal with the situation. However, Washington is reluctant to target the Houthi missile sites for fear of widening the Israel-Hamas conflict and potentially triggering retaliation by Iran. A more likely outcome is that a multinational naval coalition is boosted to protect shipping and shoot down any incoming missiles and drones. US, French and British warships have been patrolling the Red Sea area and have shot several missiles out of the sky.

Responding to the news Marco Forgione, Director General at the Institute of Export & International Trade, said: “The news that Maersk is pausing all Red Sea shipping journeys could not come at a more difficult time for global supply chains. Attacks on ships in and around Suez, which have led to this move, come at the same time as severe shipping delays through the Panama Canal because of drought. All eyes now will be on other shipping firms to see if they follow suit.

“Around 5% of all global trade relies on the Panama Canal, and 12% on Suez. They are fundamental to the flow of international trade. Without them operating smoothly, the domino effect of damage and disruption to supply chains caused by ships delayed and in the wrong places will be substantial.

“This impacts every link in the supply chain, from producer right down to end user, and will only increase the chances of critical products not making their destinations in time for Christmas.”

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