Maersk continues to pause vessels in Red Sea and Gulf of Aden

Due to the ongoing violence in the Red Sea region and continued attacks on global shipping, global ocean container line service provider A.P. Moller-Maersk said this week it would pause all vessels bound for the Red Sea/Gulf of Aden, due to the recent incident pertaining to the Maersk Hangzhou and related issued in that region.

“The situation is constantly evolving and remains highly volatile, and all available intelligence at hand confirms that the security risk continues to be at a significantly elevated level,” said Maersk. “We have therefore decided that all Maersk vessels due to transit the Red Sea / Gulf of Aden will be diverted south around the Cape of Good Hope for the foreseeable future. We understand the potential impact this will have on your logistics operations, but please rest assured that all decisions have been carefully considered and ultimately prioritize the safety of our vessels, seafarers and your cargo.”

The company added that by suspending voyages through the Red Sea/Gulf of Aden, it hopes to bring its customers more consistency and predictability despite the associated delays that come with the re-routing.

“While we continue to hope for a sustainable resolution in the near-future and do all we can to contribute towards it, we do encourage customers to prepare for complications in the area to persist and for there to be significant disruption to the global network,” it said. “Our teams are on hand to support with your planning, should you need any assistance. Vessel contingencies will continue to be communicated with customers on a case-by-case basis. Please also continue to visit our online tracker, which will be updated with the latest scheduling information as soon as it becomes available.”

In mid-December, Maersk said it is pausing all shipping through the Red Sea due to ongoing violence in the region and continued attacks on global shipping. And in a statement to Reuters on December 15, the company said it was halting shipping in the area.

Soon after, Hapag-Lloyd said it was also placing a pause on shipping in the region.

As previously reported, the sudden change served to further disrupt international shipping in a region that has been dealing with continued attacks by Houthi rebels. A day earlier, the Maersk vessel, Gibraltar, was targeted by a drone, according to a Houthi statement. Maersk denied the ship was hit by a missile, but it was the latest attack in the region.

On December 19, U.S. Secretary of Defense Lloyd Austin heralded the establishment of Operation Prosperity Guardian, a multinational security initiative comprised of United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain, with a focus on jointly addressing security challenges in the southern Red Sea and the Gulf of Aden, with the goal of ensuring freedom of navigation for all countries and bolstering regional security and prosperity.

“The recent escalation in reckless Houthi attacks originating from Yemen threatens the free flow of commerce, endangers innocent mariners, and violates international law,” said Austin in a statement. “The Red Sea is a critical waterway that has been essential to freedom of navigation and a major commercial corridor that facilitates international trade. Countries that seek to uphold the foundational principle of freedom of navigation must come together to tackle the challenge posed by this non-state actor launching ballistic missiles and uncrewed aerial vehicles (UAVs) at merchant vessels from many nations lawfully transiting international waters.”

Matthias Menck, Principal Consultant at Proxima, a supply chain and procurement consulting firm, said that the events in the Red Sea are already causing a serious headache for US businesses in both the short and long-term.

“In the short-term, ocean-freight costs for shipments bound for the East Coast from China will continue to increase,” said Menck. “Prices are already up by 52% since the crisis began, as ships look to reroute around South Africa as part of their trans-Atlantic route, leading to a delay of up to three weeks. Whilst East Coast shipments are bearing the brunt, businesses are increasingly looking to reroute shipments entirely to go to West Coast ports, pushing up prices there as freight firms adjust their capacities. Businesses are now looking at spending $1,000 more for West Coast shipments than they were before the situation in the Red Sea began. Businesses will be facing delays in receiving stock, which will have the most significant impact on those selling seasonal goods. In the longer-term, lead times will increase for imported goods, meaning businesses will have to shift their normal decision-making timescales to ensure they have adequate stock.”

Menck added that it is impossible to predict what will happen next, and, with the geopolitical situation in the region showing no signs of abating soon, businesses need to brace themselves for long-term disruption and restart conversations around onshoring or nearshoring to boost resilience.