Shipping firms continue to avoid Red Sea

Denmark’s Maersk and Germany’s Hapag-Lloyd said on Tuesday that their container ships would continue to avoid the Red Sea route after a Maersk vessel came under attack at the weekend.

Maersk’s decision extends a 48-hour pause implemented in the immediate aftermath of the attack on the Maersk Hangzhou which was repelled by US navy helicopters.

“We have made the decision to pause all transits through the Red Sea and Gulf of Aden until further notice,” the company said in an update to customers.

“In cases where it makes most sense for our customers, vessels will be rerouted and continue their journey around the Cape of Good Hope.”

Around 12% of global trade and about 3 million barrels of crude oil pass through the Red Sea per day, according to RBC Capital Markets.

The disruption threatens to drive up delivery costs, with fears it could trigger a rise in global inflation, exacerbated by volatile oil prices.

Maersk has suspended the route until further notice while Hapag-Lloyd said its vessels will sail via the Cape of Good Hope until at least 9 January. Maersk’s partner MSC is also diverting its vessels via the cape.

French shipping group CMA CGM has said it will increase its container shipping rates from Asia to the Mediterranean region by up to 100% as of 15 January compared with the start of the year.