Shipping Stoppage on the Red Sea
Location: Global (Red Sea)
Incident: Major Shipping Companies Pause Operations in Red Sea
Major shipping operators AP Moller-Maersk and Hapag-Lloyd have ceased operations in the Red Sea due to a spike in attacks on container ships.
Maersk is stopping all vessels due to pass through the Bab al-Mandab Strait and Hapag-Lloyd has said it will cease all container ship traffic through the Red Sea until at least Monday.
At least eight vessels have been attacked while transiting the Bab al-Mandab Strait in recent weeks, and vessels that travel through the area are being considered legitimate targets by Houthis.
Approximately 10% of the world’s trade crosses the strait every year and in particular the voyage of goods from the Persian Gulf to the Northern European range via the Suez Canal will be affected as all commercial container traffic that crosses to or from the Indian Ocean via the Suez Canal must also pass through.
It is not yet clear if other container ship carriers will follow suit. Regardless, the decreased capacity that has already occurred will lead to increased cost, and likely congestion at intermodal chokepoints on alternate routes. Further carriers ceasing operations would exacerbate the situation further.
Overhaul recommends companies take advantage of real time transportation visibility platforms that can aid in awareness of your cargo’s location to ensure you are made aware of disruptions as they happen.