The tension in the Red Sea threatens to cause a serious problem in freight traffic through the Suez Canal. The Swiss container transport operator MSC has joined this Saturday the Danish Maersk and the German group Hapag-Lloyd in temporarily suspending navigation in the area after the attacks on several merchant ships committed by the Houthi militias on the coast of Yemen. By stopping these operations, freight traffic in the Suez Canal, one of the busiest routes in the world, is compromised, just a few days before Christmas.
MSC is, together with Maersk, the world’s leading container operator, while Hapag-Lloyd occupies fourth position. Also in the top positions are the French group CMA CGM and the Chinese Cosco, whose ships have not suffered attacks so far.
The Houthis, who attack ships in response to the Gaza war, have hit several vessels heading to Israel and Saudi Arabia in recent days. The Californian transport platform Flexport calculates that the diversion of routes around the Cape of Good Hope not only makes transport more expensive, but also prolongs transfers by seven to ten days.
A Sydbank analyst, Mikkel Emil Jensen, quoted by the Dabesa Ritzau agency, commented that a general suspension of the Red Sea route by shipping companies could cause a “Suez canal 2.0 with increased rates, longer delivery times and less reliability of supply.” In March 2021, the container ship ‘Ever Given’ caused a serious problem in global supply chains when it became blocked in the Suez Canal, through which 10% of the world’s goods circulate.
MSC confirmed this Saturday in a statement that its ship MSC Palatium III was attacked on Friday in the Red Sea and explained that the incident has not caused any injuries, although it has caused a “limited fire” that has left the cargo ship out of service. “Due to this incident and to protect the lives and safety of our ships, until passage through the Red Sea is safe MSC ships will not transit the Suez Canal,” she says. It will divert ships to South African routes.
Yesterday Maersk announced that, “following the near miss” of its Maersk Gibraltar ship on Thursday, it had ordered its vessels in the area destined to pass through the Bab el Mandeb Strait to stop their voyage until further notice.
The Houthis claim to have carried out “a military operation against two container ships, the MSC Alanya and the MSC Palatium III, after their crews refused to respond to calls from Yemeni naval forces – which is how the Houthis are presented in their attacks at sea – as well as warning messages.” This was stated by his military spokesman, Yehya Sari.
The ships attacked have actually been three. The freighter Al Jasrah, operated by Hapag-Lloyd AG, Germany’s largest container carrier, was hit by a missile, causing a fire to break out on board, although no injuries were reported. A second projectile intended for this same ship hit the MSC Palatium III, while a third attack hit a Maersk ship. In recent days, the attack on an oil tanker by these militias has also been attributed.
Bloomberg ship tracking platforms already show that several ships such as the MSC Tessa and MSC Capella changed their route yesterday to move away from the coast of Somalia and sail along the South African coast.
The Houthi military spokesman said his militias will continue to “prevent all ships bound for Israeli ports from sailing through the Arabian Sea and the Red Sea until our brothers in the Gaza Strip receive the food and medicine they need.” Likewise, he assured that “all ships heading to all ports in the world, except Israeli ones, will not suffer any damage and must keep the identification device open.”
However, two of the three new ships attacked were not heading, at least in principle, to Israeli ports but to the Saudi port of Jeddah, according to the Marine Traffic portal, while the Al Jasrah took precisely the opposite route through the Red Sea, since which set sail from the Greek port of Piraeus to head to Singapore.
Hamburg-based Hapag-Lloyd has offices in Israel and, according to its most recent quarterly report, two of its largest shareholders are Qatar Holding Germany GmbH and the Public Investment Fund of Saudi Arabia. “Hapag-Lloyd will take additional measures to ensure the safety of our crews,” a statement from the firm said.
Shares of Maersk, Hapag-Lloyd and Israel’s Zim Integrated Shipping Services rose on Friday on expectations of a shortage in container shipping that will end the current overcapacity in this business.
MSC, the latest major operator to suspend activity in the area, controls about a fifth of the world’s container shipping capacity.
Marco Forgione, analyst at the Institute of Export
