Shipping giants Hapag-Lloyd and Maersk pause Red Sea travel amid attacks

Two shipping giants, Hapag-Lloyd and Maersk, are pausing their travel through the Red Sea and the Bab el-Mandeb Strait in the Middle East following a series of attacks on their vessels by Iranian-backed Houthi militants from Yemen.

Maersk, the world’s second largest container shipping company, moves 14.8% of the world’s trade. It said it would divert ships away from the Red Sea. The Houthi group backs Hamas, the Palestinian militant group, and has said it is targeting vessels headed for Israel.

In an email to CNBC, a Maersk spokesman said the Danish company is deeply concerned about the highly escalated security situation in the southern Red Sea and Gulf of Aden. The recent attacks on commercial vessels in the area are alarming and pose a significant threat to the safety and security of seafarers, the spokesman added, saying that employees’ safety is the company’s top priority. 

“Following the near-miss incident involving Maersk Gibraltar yesterday and yet another attack on a container vessel today, we have instructed all Maersk vessels in the area bound to pass through the Bab al-Mandab Strait to pause their journey until further notice,” the representative said.

Maersk said it would release more details about potential next steps in the coming days.

Hapag-Lloyd, which controls about 7% of the global container ship fleet, told CNBC in an email, that it will “pause all container ship traffic through the Red Sea until Monday. Then we will decide for the period thereafter.”

The Bab el-Mandeb Strait is between the Horn of Africa and the Middle East. It connects the Red Sea to the Gulf of Aden and the Arabian Sea, which feed into the Indian Ocean. This waterway is used by container ships and exports of petroleum and natural gas from the Persian Gulf.

Approximately 12% of the world’s trade, which includes 30% of all global containers, move through the Suez Canal. That then feeds through the Red Sea and Bab el-Mandeb. The significance of the Suez Canal was thrust into the spotlight in March 2021, when container ship the Ever Given was stuck for six days.

Israel based ocean carrier ZIM has re-routed vessels to avoid the Arabian and Red Seas to safeguard their vessels and crew amid the threats by the Houthis. The vessels are traveling around the Cape of Good Hope in South Africa. This alternative route to the Indian Ocean adds 10 to 14 days of travel time to a vessel’s journey. The long way around Africa also incurs higher fuel costs because of the longer travel distance. 

Since Houthi militants threatened Saturday to attack any vessels that have ownership ties to Israel, or does business in the country, there have been as many as seven incidents. Overall, 13 vessels have been attacked since the Israel-Hamas war began in early October.

In response to Friday’s attacks, in which three vessels were attacked, the World Shipping Council said it is deeply alarmed and concerned about the escalating crisis, and that it’s calling for decisive action to protect seafarers.

“The right of freedom of navigation stands as a fundamental right under international law, and must be safeguarded,” the council said. “The time for resolute international engagement is now.”

The U.S. government has been in discussions with countries of the 39-member Combined Maritime Forces to form a maritime task force to “ensure safe passage” of ships in the Red Sea.

U.S. Central Command, which oversees America’s military interests in the Middle East, has told CNBC discussions are ongoing.