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May 27, 2024

Maersk Pauses Red Sea Shipping Indefinitely Amid Ongoing Houthi Attacks

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Jan 3, 2024

Global shipping giant Maersk has announced an indefinite pause on Red Sea transits for its cargo ships, citing safety concerns due to continued attacks on commercial vessels by Iran-backed Houthi rebels in Yemen.

Escalating Houthi Aggression Forces Shipping Diversions

The latest move comes just days after Maersk vessels faced two back-to-back assaults while traversing the critical Red Sea shipping lane. On December 30th, security teams aboard the Maersk Wyoming and Maersk McKeil thwarted separate raids, utilizing warning shots and evasive maneuvers.

These incidents mark the 23rd and 24th attacks on international shipping in the Red Sea over the past two months – all attributed to Houthi forces. The rebel group has employed bomb-laden drone boats, cruise missiles, and assault teams in a violent effort to disrupt and potentially hijack commercial traffic.

Maersk had initially instituted a 24-hour halt on operations following the December 30th attacks. However, with the security situation remaining unstable, the company has now extended this pause indefinitely:

“Due to the cumulative risks related to the continued escalation seen over the past weeks, we have no choice but to extend the suspension until we see a change in conditions that will enable safe passage,” said Aslak Ross, Head of Marine Standards at Maersk.

The shipping giant stated it will continue monitoring for positive developments that would allow for reinstating its Red Sea routes. In the meantime, Maersk vessels will be diverted around the southern tip of Africa – adding significant time and fuel costs to deliveries.

International Response Fails to Deter Houthi Aggression

The series of Houthi attacks has provoked action from the international community, though navy patrols and limited strikes have so far failed to curb the rebel onslaught:

  • Dec 31 – U.S. Navy helicopters sank three Houthi assault boats and killed all crew members, after the teams opened fire on the destroyer USS Winston Churchill
  • Dec 30 – Security forces aboard the Maersk Wyoming repelled an attack by warning shots, causing the assailants to abandon their approach
  • Dec 26 – Multiple Houthi bomb-laden drone boats targeted a fuel tanker, but were intercepted by Saudi naval forces
  • Dec 25 – A Houthi rebel missile struck an oil tanker in the Red Sea, but was brought down by defensive fire from the USS Gravely

The United Kingdom has also joined the strong chorus condemning Houthi actions, with officials stating they are prepared to conduct retaliatory airstrikes if aggression continues.

So far though, Houthi leadership appears undeterred by the force used against them and insists they will maintain pressure until a negotiated settlement is reached regarding use of the contested Hodeidah port.

Shipping Giants Reroute Vessels Around Africa’s Cape

With conditions remaining precarious in the Red Sea, major carriers have opted to avoid the area entirely despite the significant impacts to costs and delivery times.

Maersk has been joined by Mediterranean Shipping Company (MSC), Hapag-Lloyd, and CMA CGM in pausing Red Sea operations for the foreseeable future. Shipping experts estimate the longer journey around the Cape of Good Hope will add approximately $26,000 per day in fuel expenditures alone for diverted vessels.

Company Red Sea Status Est. Extra Cost Per Vessel
Maersk Indefinitely Suspended $23,000 fuel daily
MSC Indefinitely Suspended $26,000 fuel daily
Hapag-Lloyd Suspended Through March $25,000 fuel daily
CMA CGM Select Vessels Suspended $24,000 fuel daily

While major carriers take steps to avoid new attacks, rates for travel through the critical Suez Canal have also risen sharply due to risk premiums now charged by insurers. These cascading effects stand to raise prices significantly for a wide range of imported goods.

No Clear Path Forward as Attacks Persist

Houthi aggression in the Red Sea is tied to the rebel group’s ongoing conflict with a Saudi-led coalition supporting Yemen’s government forces. After seizures of Yemeni ports last month, the Houthis have employed asymmetric naval warfare to try and force concessions around use of the strategic Hodeidah port.

With little progress made diplomatically so far, the rebels seem intent to continue their attacks which are inflicting mounting economic damage. As long as conditions remain unstable, commercial shipping giants will stay wary of exposing their crews and vessels to further danger.

Unfortunately, there appears to be no clear resolution in sight for the crisis, which threatens to have significant ripple effects across global markets. With over $1 trillion in trade flowing through the critical Red Sea corridor each year, major disruptions to this shipping artery could inflict severe new pressures on inflation and strained supply chains.

Conclusion

Maersk and other shipping leaders face a difficult choice – absorb major operational impacts from prolonging Red Sea suspensions, or subject crews and cargoes to dangerous conditions that show no signs of abating. As unrest persists, reverberations will likely spread broadly across the interconnected global economy.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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