Companies Resort To Re-routing Amid Red Sea Attacks

Houthi militants in Yemen have stepped up attacks on vessels in the Red Sea, impacting a shipping route vital to east-west trade. In response, some shipping companies have instructed vessels to instead sail around southern Africa, a longer and therefore more expensive route.

Actions Taken

Below are actions taken by companies:

C.H. Robinson

The global logistics group said on December 22 that it had rerouted more than 25 vessels around Africa over the previous week, and that number was likely to grow.

“Blank sailings and rate increases are expected to continue across many trades into Q1 of 2024,” it said.

CMA CGM

On February 2, the French shipping group suspended until further notice all crossings by its vessels of the Bab al-Mandab Strait in and out of the Red Sea.

It had previously said it would reroute a weekly service between Europe and Australia to avoid attacks, and that it expected months of disruption.

Euronav

The Belgian oil tanker firm said on December 18 it would avoid the Red Sea until further notice.

Evergreen

The Taiwanese container shipping line said on December 18 its vessels on regional services to Red Sea ports would sail to safe waters nearby, while ships scheduled to pass through the Red Sea would be rerouted around Africa. It also temporarily stopped accepting Israeli cargo.

Frontline

The Norway-based oil tanker group on December 18 said its vessels would avoid the Red Sea and the Gulf of Aden.

Gram Car Carriers

The Norwegian auto carrier said on December 21 its vessels were restricted from passing through the Red Sea.

Hafnia

The Norwegian shipping firm said on January 12 it has halted all ships heading towards or within the Bab al-Mandab Strait.

Hapag-Lloyd

The German container shipping line said on January 22 it will continue to route its vessels around Africa until further notice.

The company also said it is introducing land corridors from Jebel Ali, Dammam and Jubail to its ocean shuttle service out of Jeddah to mitigate the impact on its business.

CEO Rolf Habben Jansen warned on January 31 the attacks on cargo vessels in the Red Sea are unlikely to cease soon, adding that a political deal and a mission to protect freight vessels might bring a resolution within six months.

The company swung to a wider-than-expected fourth-quarter operating loss due to lower transport volumes following the attacks on ships in the Red Sea.

Maersk

The Danish shipping group on January 5 suspended Red Sea traffic “for the foreseeable future.” On January 18, Maersk said the Red Sea disruptions and winter weather were causing congestion at container terminals, urging customers to pick up their units as soon as possible. It also started offering customers the option to shift some cargo from vessels to air freight at ports in Oman and the UAE.

A day earlier, its CEO said the Red Sea-related disruption to global shipping would likely last at least a few months. On January 16, Maersk sent two container ships through the Red Sea carrying goods for the U.S. military and government.

On January 25 it suspended Red Sea transits by vessels of Maersk Line, Limited (MLL), its U.S. subsidiary carrying cargo for U.S. government agencies.

MSC

Mediterranean Shipping Company (MSC) said on December 16 its ships would not transit through the Suez Canal.

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Source: Gulfbusiness

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