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  • Maggie Mildenberger

Shipping Lines Continue to Avoid the Red Sea

Following up on a story we highlighted in December 2023, hijacking attempts and missile attacks on commercial shipping vessels persist throughout the Red Sea, and continue to impact international trade and passage through the Suez Canal. 


Responding to a missile attack and then attempted boarding on the Maersk Hangzhou on December 30 - 31, 2023, only days after Maersk had resumed transiting the region, the Denmark-owned shipping giant announced in a statement this morning that they have once again paused transit through the Red SeaA temporary 48-hour pause on all Maersk vessels in transit through this lane had been put in place following the attack, while Maersk officials decided between resuming operations in the Red Sea or redirecting around the Cape of Good Hope in Africa. Now all Maersk transit through the Red Sea region will be paused "until further notice".


One of Maersk's rivals, German based Hapag-Lloyd announced its decision to extend avoidance of Red Sea routes until Jan 9th. Other shipping giants are following suit, as data collected shows about half of all containerships booked to transit the Red Sea and Suez Canal are being diverted. This represents about 18% of all global container trade capacity being diverted around the Cape of Good Hope.


While a multinational US-led naval effort, named Operation Prosperity Guardian, has been successful in intercepting many of these attacks, Bloomberg Economics reports that this is an "expensive strategy", and "might not be sufficient for major shipping companies to resume shipping transits....the longer [these] attacks continue, the more pressure the US will face to go on the offensive, which risks regional escalation."


For vessels traveling west from Asia, re-routing around the Cape of Good Hope has proven to be a preferred option, but reports have shown this adds 8-12 extra days of transit, in addition to aestimated $1 million in extra fuel costs. This option can have further ripple effects, as well, leaving empty containers out of position, delaying transit for goods otherwise not entering the region. 


Vessels sailing east from Asia, particularly to the US West Coast, are not otherwise affected, though the challenges imposed by the drought at the Panama Canal remain present for vessels bound for the US East Coast. Overall, this makes for a constricted schedule with higher costs being passed on to shippers as we head toward the Lunar New Year’s extended closures. 


Audit Logistics remains committed to monitoring vessels and container routes, sending out weekly reports through our Coordinating Team. We will continue to provide detailed sailing information with predicted schedules on our projects, highlighting any delays re-routing may cause. Please reach out to your Freight Manager if you have any questions.


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