Maersk and Hapag Pause Red Sea Runs as Industry Calls for Immediate Action

 

Shipping giants Maersk and Hapag-Lloyd both confirmed today that they have paused all planned transits of the Red Sea and the Bab al-Mandab Strait while the shipping industry is calling for immediate actions and a stop to “flagrant breach of international law” which is risking the lives of seafarers and global trade. The actions came after the recent escalation which saw a missile land close to a Maersk containership yesterday, a confirmed strike on a Hapag vessel today, and two MSC containerships targeted by the Houthi with one possibly struck.

“We have instructed all Maersk vessels in the area bound to pass through the Bab al-Mandab Strait to pause their journeys until further notice,” Maersk said in a written statement issued today Friday, December 15. The shipping giant operating the world’s second-largest containership fleet said it is “deeply concerned about the highly escalated security situation,” while calling the recent attacks “alarming” and saying they pose a significant threat to the safety and security of seafarers.

Maersk had previously rerouted two of its vessels owned by XT Shipping, which is based in Haifa, Israel. Earlier today, the company also reported that it “expected to phase out” one of the vessels, the Liberian-registered Maersk Pangani (63,696 dwt) from its current route. While only saying “unforeseen circumstances,” the company said the vessel would be omitting a call in the Persian Gulf at Jebel Ali in Dubai and return to India. The alert said they expected to replace her on the route with another Maersk ship in February 2024.

Hapag-Lloyd after confirming that one of its containerships had been attacked today while sailing close to the coast of Yemen, said it “will take additional measures to secure the safety of our crews. Hapag-Lloyd is pausing all container ship traffic through the Red Sea until Monday (December 18). Then we will decide for the period thereafter.”

The two shipping companies' statements came a day after Bloomberg reported that it had seen an internal memo at Maersk Tankers altering customers that the company was holding the option of rerouting vessels in its pool to sail around Africa and avoid the Red Sea. The International Chamber of Shipping also said today that “some companies have already rerouted around the Cape of Good Hope,” adding cost and delays to global trade with it understood the industry was considering additional actions that could lead to further ships diverting.

The Bab al-Mandab is a potential choke point as it is just 20 miles wide with defined north and south lanes for safe transit. Approximately 10 to 12 percent of global trade passes through the area or more than 17,000 ships each year.

Speaking before the recent developments, well-known analyst Peter Sand of Xeneta predicted it was “highly unlikely the Suez Canal will close…I still believe most ships will continue to transit the Suez Canal despite this risk, just as they did when piracy was such a high risk.”

U.S. officials said they are continuing to work on efforts at building on the existing Task Force in the region to provide greater security. They point out that 39 nations participate in the efforts focused on the Indian Ocean and east into the Persian Gulf region.

The World Shipping Council issued a statement calling for action. The European Community Shipowners’ Association and European Transport Workers’ Federation also issued a joint statement calling for “immediate action to urgently address this alarming situation.” 

"ECSA strongly advocates for the enhancement of protective structures for the security of commercial vessels transiting through the area. These measures are crucial to ensure the safety and well-being of our seafarers and to enhance the security of vital trade routes” said Sotiris Raptis, ECSA Secretary General.

The ICS also issued a statement saying the trade association “deplores the actions of the Houthis in the strongest terms and calls for the immediate cessation of these attacks... States with influence in the region should, as a matter of urgency, work to stop the actions of the Houthis in attacking seafarers and merchant ships, and de-escalate what is now an extremely serious threat to international trade.”

Discussing the potential impact of trade and the shipping industry, Sand said he “would expect some kind of over-reaction in the short-term, where rates will jump on all trades which utilize the Suez Canal.” He points out that the only alternative available for the carriers to avoid the Red Sea and the strait is to instead go around the Cape of Good Hope on the southern tip of Africa, which adds up to 10 days sailing time.