Shipping Route Decision Made By Maersk After Recent Red Sea Attacks

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  • Maersk to update route plans.
  • Hapag-Lloyd has chosen to continue diverting its vessels.
  • MSC is currently diverting its vessels via the Cape of Good Hope.

Denmark’s Maersk is contemplating whether to resume sending vessels through the Suez Canal after an attack by Yemen-based Houthi militants on the Maersk Hangzhou, prompting a temporary pause in Red Sea sailings, reports Reuters.

Hapag-Lloyd’s Decision

Rival company Hapag-Lloyd has chosen to continue diverting its vessels away from the Red Sea through the Cape of Good Hope until at least Jan. 9, with a pending decision on whether to prolong the re-routing.

Financial Market Reaction

Shares in both Maersk and Hapag-Lloyd experienced positive increases following the crisis, with expectations of elevated freight rates due to longer routes.

Shipping Impact and Route Costs

The attack has influenced major shipping groups to avoid the Red Sea, opting for longer journeys and potentially incurring an estimated extra cost of up to $1 million in fuel for each round trip between Asia and northern Europe.

Houthi Militant Attacks and Global Shipping Concerns

The Yemen-based Houthi militants, supporting the Palestinian group Hamas in its conflict with Israel, initiated attacks on international shipping in November, leading to heightened concerns in the shipping industry.

Impact on Red Sea Routes

The control exerted by the Houthis in parts of Yemen has resulted in shipping companies like Maersk and Hapag-Lloyd avoiding the Red Sea, redirecting their vessels on longer routes.

U.S.-Led Protection Efforts

Deployment of a U.S.-led military operation aimed at safeguarding ships has influenced Maersk to consider resuming Red Sea routes after previously suspending them.

Maersk’s Plans

Maersk, alongside its alliance partner Mediterranean Shipping Company (MSC), is evaluating its shipping routes in response to recent events. MSC is currently diverting its vessels via the Cape of Good Hope.

Ongoing Evaluations and Market Impact

The shipping industry, particularly affected by the Suez Canal’s closure, is carefully assessing the situation. The Suez Canal plays a critical role in facilitating roughly one-third of global container ship cargo, impacting trade and shipping operations worldwide.

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Source: Reuters

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