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More costly and 10-days longer: Maersk changes ship routes over Houthi attacks

More costly and 10-days longer: Maersk changes ship routes over Houthi attacks Maersk changes ship routes over Houthi attacks (Getty Images)

Maersk, a major player in container shipping, has announced a strategic shift in its shipping routes by diverting all its large vessels away from the traditional Red Sea paths. This decision is a response to increased security risks over Houthi attacks, according to Reuters.

The Yemeni militants intensified their assaults on vessels as a show of support for the Palestinian group Hamas in its war with Israel in Gaza.

Given the escalating security concerns, Maersk has opted to navigate its ships around the Cape of Good Hope, located at the southern tip of Africa, instead of using the shorter route through the Red Sea and Suez Canal. This change in route adds approximately 10 days to the journey, entails higher fuel consumption, and requires additional crew time, contributing to a significant surge in shipping costs with estimates reaching up to $1 million in extra fuel expenses for each round trip between Asia and Northern Europe.

Maersk's decision follows an attack on one of its ships by Houthi militants earlier in the week, prompting the company to initially halt all vessels heading for the Red Sea. Subsequently, the shipping giant has begun rerouting its ships to circumvent the Red Sea region entirely.

In a statement released on Friday, Maersk emphasized the evolving and volatile nature of the situation. "While we continue to hope for a sustainable resolution in the near future and do all we can to contribute towards it, we do encourage customers to prepare for complications in the area to persist and for there to be significant disruption to the global network," Maersk said.

Situation in the Red Sea region

Suez Canal is a key passage for approximately one-third of global container ship cargo.

Since November, Yemeni Houthi rebels have been conducting attacks on trade vessels with ties to Israel in the Red Sea. On December 16, 2023, a British destroyer with a Sea Viper missile reportedly intercepted and destroyed a drone that was attempting to target a commercial ship in the Red Sea.

On December 19, 2023, the Pentagon announced the initiation of a special operation named Prosperity Guardian to safeguard maritime traffic in the Red Sea. Over 20 countries have already agreed to join the coalition led by the United States to protect commercial shipping in the Red Sea from Houthi attacks.