Maersk to Resume Vessel Transit Through Red Sea Amid Ongoing Houthi Threat

Workers taking a break outside an under-construction Maersk triple-E class container ship at the Daewoo DSME shipyard in Okpo, 60km south of Busan, on Dec. 3, 2014. (Ed Jones/AFP via Getty Images)

Danish shipping giant Maersk said it intends to resume shipping through the Red Sea region after earlier canceling it due to security concerns related to Houthi attacks.

In mid-December, Maersk suspended shipments through the Red Sea following drone and missile attacks on ships in the region. On Sunday, the company announced it would be resuming operations through the route. “We have received confirmation that the previously announced multi-national security initiative Operation Prosperity Guardian (OPG) has now been set up and deployed to allow maritime commerce to pass through the Red Sea / Gulf of Aden and once again return to using the Suez Canal as a gateway between Asia and Europe,” the company said in a Dec. 24 update.

“With the OPG initiative in operation, we are preparing to allow for vessels to resume transit through the Red Sea both eastbound and westbound. We are currently working on plans for the first vessels to make the transit and for this to happen as soon as operationally possible.”

U.S. Secretary of Defense Lloyd Austin announced the OPG initiative last week to “jointly address security challenges in the southern Red Sea and the Gulf of Aden,” and to ensure freedom of navigation in the region.

Over 20 nations have signed up to the coalition, including France, Italy, Canada, the UK, Spain, the Netherlands, Bahrain, and Seychelles.

The OPG initiative came into existence after Iran-backed Houthi militia in Yemen began attacking merchant vessels traversing the Red Sea, citing retaliation for Israel’s operations in Palestine. According to the U.S. Central Command, the Houthis have attacked 15 commercial shipping vessels since Oct. 17.

Maersk had announced suspending transit via the Red Sea on Dec. 15 following a “near-miss incident involving Maersk Gibraltar on Thursday 14 December 2023 and yet another attack on a container vessel on Friday 15 December 2023.”

With Maersk now deciding to resume transportation through the Red Sea route, the company is “assessing the immediate effects of the resolution,” including understanding the impact it will have on factors like surcharges, bookings, diverted vessels, etc.

The company stressed that while security measures are in place to ensure passage for its vessels through the region, “the overall risk in the area is not eliminated at this stage.”

As such, it “will not hesitate to re-evaluate the situation and once again initiate diversion plans if we deem it necessary for the safety of our seafarers.”

Shipping Delays and Rising Costs

In addition to Maersk, other major shipping firms like Hong Kong’s OOCL, Germany’s Hapag-Lloyd, and Switzerland’s MSC are also avoiding passage through the Red Sea.

The Suez Canal, which connects the Red Sea with the Mediterranean, is the quickest sea route between Asia and Europe.

Due to tensions in the Red Sea, many ships are being diverted to take the longer route around Africa, passing via the Cape of Good Hope in the south of the continent. This extends shipment time and adds to the costs.

For instance, vessels take around 25.5 days to travel from Taiwan to the Netherlands using the shipping route through the Suez Canal. The alternative route around Africa would result in the total travel time extending to 34 days, according to the BBC.

“Diverting vessels around the Cape of Good Hope to mitigate the ongoing risks of sailing through the region is a necessary step in the interest of safety, but it has ultimately brought about increased costs for carriers,” Maersk said in a Dec. 21 update.

Beginning Jan. 1, the company intends to apply a Peak Season Surcharge (PSS) for selected markets. Maersk is already charging Transit Disruption Surcharge (TDS) on diverted vessels. France-based shipping firm CMA CGM is also imposing extra charges on rerouted vessels.

Operation Prosperity Guardian

During a Dec. 21 press conference, Air Force Maj. Gen. Pat Ryder said that over 20 nations have signed on to participate in Operation Prosperity Guardian.

“It’s very important to understand that the Houthis aren’t attacking just one country, they’re really attacking the international community,” Mr. Ryder said.

“They are attacking the economic well-being and prosperity of nations around the world. So in effect, they really become bandits along the international highway that is the Red Sea.”

The participating nations will contribute military assets like ships and aircraft to the operation, which will serve as a highway patrol in the Red Sea and the Gulf of Aden. The patrol will respond and assist commercial vehicles transiting through the region.

The area covered under the operation is a large, roughly the distance between Washington D.C. and Boston. “The Houthis need to stop these attacks, and they need to stop them now … That’s clear and simple,” Mr. Ryder said.

“They really need to ask themselves if they’ve bitten off more than they can chew when it comes to taking on the entire international community and negatively impacting billions and billions, billions of dollars in global trade, economic prosperity, and international law.”