Breaking. Maersk running the gauntlet !

Denmark’s Maersk has arranged for the deployment of several dozen container vessels through the Suez Canal and the Red Sea in the coming days and weeks, signalling a resurgence in the utilization of this maritime route as reported by Reuters.

Major shipping companies worldwide, including industry leaders Maersk and Hapag-Lloyd, had ceased using the Red Sea routes due to security concerns arising from attacks on vessels by the Iran-backed Houthis in Yemen earlier this month, causing disruptions in global trade.

This can mean one of two things;

• either Maersk and the other unnamed shipping companies who also plan to transit the Suez believe that the American led coalition, Operation Prosperity Guardian will be able to protect them, or,
• They have had some form of assurances that they will not be attacked by the Houthis.

Personally I think they have received some assurances from the Houthis. If on the other hand it is the former, this may be a grave mistake. If the Houthis launch any kind of offensive and manage to damage any ships, this will be a grave blow to the coalition and their only option would be to respond massively which could further escalate things.

As of early Wednesday afternoon, Maersk’s stock price experienced a 5 percent decline, partially offsetting gains from the previous week. The return to shorter routes via the Suez Canal from circumnavigations around Africa may prompt a correction in freight rates. Maersk emphasized that its schedule is subject to change based on evolving contingency plans that may be formulated in the coming days.

The Maren Maersk, which set sail from Tangiers on December 24, was among the vessels listed in Maersk’s advisory to clients on Wednesday. It is scheduled to “continue via the Suez Canal,” with an estimated arrival time in Singapore on January 14. However, the advisory also indicated that many of Maersk’s vessels are still planned to take the route around Africa.

I hope that Maersk has thought through this strategy.