Shipping giants including MSC, CMA CGM, A.P. Moller-Maersk and Hapag-Lloyd have halted their vessels from entering the southern entrance of the Red Sea following attacks on their ships this past weekend. Avoiding the Red Sea means avoiding the Suez Canal leaving navigating around the Cape of Good Hope the next best option. This inevitably adds costs and delays in global trade with costs being passed to import/export-based businesses in the form of a general rate increase and/or additional fees. See the image below for information about the change in routing and the increase in shipping time.
Maersk’s decision came after a near-miss incident involving the Maersk Gibraltar on Thursday, December 14th, 2023, and another attack on a container vessel on Friday, December 15th, 2023. The companies instructed their ships in the area to pause their journeys due to heightened security concerns. Recent attacks on commercial vessels in the southern Red Sea and Gulf of Aden have raised alarm, prompting concerns for the safety of seafarers.
Ship operators face increased risks as Iran-backed Houthi forces in Yemen target commercial ships in response to the ongoing conflict between Israel and Hamas. Some companies like ZIM have already opted to reroute their ships around the Cape of Good Hope to avoid Houthi aggression. Both companies OOCL and COSCO have stopped accepting Israeli cargo in response to the risk. The shift in the region’s security situation has prompted a change in shipping routes, with the Red Sea being a crucial waterway that links Europe and Asia. Currently, 12% of global trade passes through the Red Sea.
The International Chamber of Shipping urged influential nations to intervene and prevent further attacks. At least eight ships have been attacked in recent weeks in the Bab el-Mandeb Strait, prompting calls for a multinational naval force to protect commercial vessels in the region.
For information about whether your shipment is affected, please contact the Canaan Group Sales team.