Maersk Diverts Ships to Avoid Red Sea Risks : Adding Costs to Global Shipping
In a strategic move to mitigate the risk of attacks by Yemen-based Houthi militants, Denmark’s Maersk announced on Thursday that it has redirected four out of five container vessels from the Red Sea back towards the Suez Canal. The decision was made amid rising concerns over recent Houthi attacks on vessels in the southern Red Sea, including a Maersk ship, which disrupted global trade and sparked fears of increased inflation due to soaring shipping rates.
The Houthi attacks prompted the United States to launch a multinational operation on December 19 to safeguard commerce in the Red Sea. However, despite these efforts, many shipping companies, including Maersk, and cargo owners are still opting to reroute vessels around Africa.
Maersk had briefly considered resuming Red Sea voyages last week but, on Tuesday, the company announced that its container ships would once again avoid the route leading to the Suez Canal. Unfortunately, five Maersk ships en route to Asia had already traversed the canal from the north and were on the verge of passing south past Yemen when the decision to avoid the route was made. This left the crews and tens of thousands of containers in a state of uncertainty.
ALSO READ : RJ MacIsaac Achieves Historic Certification from Lloyd’s Register for International Ship Recycling Standards
The container vessels affected by the rerouting decision include the Maersk Genoa, Maersk Londrina, Ebba Maersk, and Gjertrud Maersk. These ships, which had been positioned in the Red Sea just south of Saudi Arabia’s port of Jeddah in recent days, were redirected around the Cape of Good Hope, according to Maersk’s schedule. A fifth vessel, the Maersk Utah, was also stranded in the area, and while it had not been rerouted at the time of the announcement, a Maersk spokesperson confirmed that it would not sail past Yemen.
Opting to send the vessels back via the Suez Canal would entail additional fees for the passage through the canal, along with significant delays and extra fuel costs for a journey around the Cape of Good Hope. Maersk had already implemented a transit disruption surcharge (TDS) and a peak season surcharge (PSS) the previous month, adding a total of $700 to the cost of a standard 20-foot container traveling from China to Northern Europe.
The decision to reroute the vessels underscores the gravity of the security situation in the Red Sea, with Maersk prioritizing the safety of its crew, vessels, and cargo. The move also highlights the economic implications of such security concerns, as global shipping companies face additional costs and logistical challenges.
But five Maersk ships headed towards Asia had already traversed the canal from the north and were poised to travel south past Yemen when the pause was announced, leaving the crews and tens of thousands of containers in limbo.
The Maersk Genoa, Maersk Londrina, Ebba Maersk and Gjertrud Maersk container vessels, which had been sitting in the Red Sea just south of Saudi Arabia’s port of Jeddah in recent days, were on Thursday rerouted around the Cape of Good Hope, a Maersk schedule showed.
ALSO READ :Â Ship Recycling in 2024 : The Prospects and Challenges for Alang
The Suez Canal is a crucial waterway, facilitating approximately one-third of global container ship cargo. Rerouting ships around the southern tip of Africa is expected to incur up to an extra $1 million in fuel costs for every round trip between Asia and Northern Europe. This added financial burden may contribute to a further rise in shipping rates, potentially impacting global trade and inflation.
As the situation unfolds, Maersk’s decision to reroute vessels reflects the delicate balance between ensuring the safety of maritime operations and managing the economic fallout of increased security risks. The ripple effects of such disruptions extend beyond individual companies, impacting the interconnected web of global trade and supply chains. Observers will closely monitor developments in the region and assess the long-term implications for the shipping industry and the broader global economy.
