The crisis in the Red Sea has seen a significant uptick on the last day of 2023 with militant attacks on commercial shipping and responses from the Navy..
Maersk, the 2nd largest container shipping line in the world has again paused its Red Sea sailings after an attack on its ship Maersk Hangzhou, a 14,000 TEU capacity containership deployed on Maersk’s AE12-service between Europe and Asia..
Details of the new developments in Red Sea
As per the U.S. Central Command, they received a second distress call in less than 24 hours from Maersk Hangzhou, reporting being under attack by four Houthi boats originating from Houthi-controlled areas in Yemen..
The Houthis reportedly fired at the Maersk Hangzhou getting to within 20 meters of the vessel and attempting to board the ship.. A contracted security team on board the Maersk Hangzhou returned fire..
U.S. helicopters from the USS Eisenhower and Gravely responding to the distress call returned fire in self-defense, sinking three of the four small boats and killing the Houthi crew while the 4th boat fled the area..
In response to the attack, Maersk has suspended all Red Sea sailings for 48 hours, a decision that underlines the severity of the threat posed by militants targeting vessels in this strategic maritime corridor..
On the other side, recognizing the heightened risks, Danish unions have secured a deal to double wages for crew sailing through the Red Sea.. This agreement underscores the seriousness of the situation and its direct impact on those at the forefront of this crisis..
What started with the hijacking of the Galaxy Leader, a Bermuda-flagged car carrier, in Yemeni waters has escalated rapidly illustrating the dangers faced by mariners leading to International and Corporate Responses along with Naval Contributions and Operations by various countries..
Denmark’s decision to send a frigate to join the US-led Operation Prosperity Guardian is proof of this increased international military involvement which aims to bolster maritime security in the face of ongoing attacks on civilian shipping..
Rerouting decisions by major shipping firms
While many shipping lines are avoiding the Red Sea and opting for longer voyages around the Cape of Good Hope in Africa amid security concerns, Maersk has halted transits to reassess the situation and this precautionary measure reflects the uncertainty and challenges faced by shipping companies in navigating these risky waters..
There are also some very useful insights from Lars Jensen on his LinkedIn which highlights the varied responses within the industry..
Lars wrote in his post “Of the global carriers, the main focus in recent days has been on Maersk and CMA CGM who had resumed full or partial usage of the Suez routing. But looking at vessel movements as well as the schedules on the carriers’ own websites it is clear that COSCO had also begun a redicrection of at least some of their own vessels to a Suez-routing. However, the Chinese carrier have just not issued any statements as to their stance on this matter. Multiple COSCO operated vessels can be seen to be heading on a Suez-routing from both east and westbound directions.
Unlike the Maersk vessels which are now seen to be going into a holding position if they were approaching the Bab al-Mandeb, COSCO is for now continuing (afternoon 31 Dec).
It is interesting to note that OOCL, which is owned by COSCO, has a very clear advisory stating that all OOCL operated vessels are diverted around the Red Sea for safety reasons – which is not aligned with the actions of the parent company.”
Broader context and future outlook
The Red Sea crisis poses significant challenges to global trade, with major shipping companies rerouting to avoid risk.. This shift has implications for shipping costs, delivery times, and the global supply chain with many customers already complaining about the additional surcharges levied on them..
Many shippers and forwarders hold the view that the carriers who have implemented these surcharges are following their money-making patterns of the COVID-19 days resulting in huge spikes in freight rates..
In addition, there are also geopolitical and security dimensions to consider as these attacks attributed to Iranian-backed Houthi militants, have drawn military responses from various countries including the United States, France, Denmark, India, Indonesia, and others, all trying to protect their countries assets in the Red Sea region.. The involvement of these forces underscores the complex and volatile nature of the crisis..
The Red Sea crisis remains unresolved as we end 2023, posing ongoing threats to international shipping and global trade.. The situation demands continuous monitoring and flexible response strategies from shipping lines and international forces..
2024 will be crucial in determining the course of the Red Sea crisis and its impact on the global maritime landscape..