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A Maersk containership is seen near Suez Canal Bridge which is known as the "Peace Bridge" in the Suez Canal, Egypt, August 6, 2023. Suez Canal Authority/Handout via REUTERS

A Maersk containership is seen near Suez Canal Bridge which is known as the "Peace Bridge" in the Suez Canal, Egypt, August 6, 2023. Suez Canal Authority/Handout via REUTERS

Shipping Bosses Warn Maritime Security in the Red Sea Getting Worse, Not Better

Bloomberg
Total Views: 2183
February 8, 2024

(Bloomberg) —

Major shipping companies are warning that the security situation in the Red Sea is continuing to deteriorate, despite efforts by the west to limit attacks by Yemen’s Houthi rebels. 

The bosses of A.P. Moller-Maersk A/S and D/S Norden A/S said on Thursday that they felt the threat level was continuing to escalate in the region. It comes after Japanese shipping giant Mitsui OSK Lines Ltd. said the disruption on the route could last for a year. 

Swaths of the merchant fleet have been avoiding the waterway since attacks by the Houthis began in mid-November. The area grew even more volatile after the US and UK launched airstrikes in the middle of last month, prompting major owners in all sectors to avoid the region. 

“We’ve not seen the level of threat peak, to the contrary,” Maersk Chief Executive Officer Vincent Clerc said in a Bloomberg TV interview. “The amount or the range of weapons that are being used for these attacks is expanding and there is no clear line of sight to when and how the international community will be able to mobilize itself and guarantee safe passage for us.”

The shipping companies’ perceptions of risk matter because they are what will dictate when vessels return to the region. All of the owners said they will continue to re-route their ships until it is safe to travel the Red Sea. 

In addition to the airstrikes launched by the US and UK, there’s also a defensive force operating in the Red Sea known as Operation Prosperity Guardian. Play Video

Military ships in the region have been attempting to thwart missile strikes on merchant vessels over the past few weeks, but the Houthis have continued their attacks. There’s also been a parallel uptick in Somali piracy. 

In order to be confident about sailing through again, there need to be signs of a period of stability Norden Chief Executive Officer Jan Rinbo said. Only when that is combined with a period of no attacks would it be viable for merchant shipping to think about returning, he added. 

“You need to have a de-escalating situation, and we are not at that point yet,” he said by phone. “If anything it just seems to escalate.” 

Re-Routing

Clerc said Maersk will continue to re-route its ships around Africa for several more weeks and has previously said that the company would need to be “absolutely certain” the waterway was safe before sailing there again. 

MOL said its diversions will continue for at least the next two to three months, while Norden said it doesn’t expect an imminent resolution. 

At the same time, dry weather means the Panama Canal — one of the world’s other vital maritime chokepoints — has reduced traffic due to low water levels. Alongside the Red Sea crisis, that’s causing vast numbers of ship diversions.

“That really is unprecedented,” Norden’s Rindbo said. “I’ve not in my 29 years in shipping seen anything like this.”

© 2024 Bloomberg L.P.

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