International shipping companies are still halting shipments in the Red Sea region.
On Tuesday, companies Maersk from Denmark and Hapag-Lloyd from Germany announced that their cargo ships will still refrain from using the Red Sea route, which provides entry to the Suez Canal. This decision was made after a recent attack on a Maersk ship over the weekend.
Both major shipping companies are redirecting certain trips through the southern Cape of Good Hope in Africa due to attacks by Houthi rebels in Yemen on cargo ships in the Red Sea. This disturbance has the potential to increase shipping expenses for products, causing concerns that it may lead to a new wave of global inflation.
On Sunday, Maersk temporarily stopped all sailings in the Red Sea for 2 days due to Houthi militants’ attempt to board the Maersk Hangzhou. American military helicopters successfully defended against the attack and eliminated 10 of the attackers.
Maersk stated that they are currently conducting an investigation into the incident and will maintain a temporary halt on all cargo transportation in the area until they are able to fully evaluate the dynamic situation.
“In situations where it is most convenient for our customers, ships will be redirected and continue their voyage via the Cape of Good Hope.”
On Monday, a report indicated that Maersk had over 30 ships carrying containers that were scheduled to travel through the Suez Canal via the Red Sea, and that 17 additional trips were delayed.
Hapag-Lloyd announced that its ships will still avoid the Red Sea and instead travel through the southern tip of Africa until January 9. At that point, the company will evaluate whether to continue redirecting its vessels.
Around one-third of the world’s container ship cargo passes through the Suez Canal. It is estimated that rerouting ships around the southern tip of Africa will result in an additional cost of up to $1 million in fuel for each round trip between Asia and northern Europe.
The Maersk Hangzhou, which was struck by an unidentified item during the recent attack, was able to resume its journey.
The Houthis, who are backed by Iran and have gained control over certain areas in Yemen through years of conflict, initiated assaults on global maritime vessels in November. This was done in solidarity with Hamas, a Palestinian Islamist organization, as they engaged in a conflict with Israel in the Gaza Strip.
This caused major shipping companies such as Maersk and Hapag-Lloyd to cease using routes through the Red Sea and opt for a longer journey around the Cape of Good Hope.
However, following the implementation of a U.S.-led military mission to safeguard ships, Maersk announced on December 24 that it would once again utilize the Red Sea for transportation.