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Global News Container lines await Red Sea naval protection as they divert from Suez

Registration dateDEC 27, 2023

Mark Szakonyi, Executive EditorDec 17, 2023, 5:56 PM EST
Articles reproduced by permission of Journal of Commerce.

Mark Szakonyi, Executive Editor
Dec 17, 2023, 5:56 PM EST
Articles reproduced by permission of Journal of Commerce.

Container lines await Red Sea naval protection as they divert from Suez CMA CGM, Hapag-Lloyd, Maersk and Mediterranean Shipping Co. have stopped transiting the Suez Canal after Friday’s attacks against MSC’s Palatium III and Hapag-Lloyd's Al Jasrah. Photo Credit: David G40 /Shutterstock.com
Container lines are pausing Suez Canal transits and instead routing services around the Cape of Good Hope as they await the US Navy to step up maritime protection in the Red Sea following an increasing number of attacks on commercial shipping, including missiles hitting ships in two separate incidents on Friday.

US Secretary of Defense Lloyd Austin will outline an expanded force -- Operation Propensity Guardian -- on Monday in Israel, according to The Guardian and The Drive, a defense-focused news outlet. CMA CGM, Hapag-Lloyd, Maersk and Mediterranean Shipping Co., have stopped transiting the Suez Canal after Friday’s attacks against MSC’s Palatium III and Hapag-Lloyd's Al Jasrah.

There were no injuries aboard the Al Jasrah and it has resumed its journey to Asia with Singapore as the next port of call. MSC said no injuries were reported to the crew of the Palatium III, and there was limited fire damage.

“Due to this incident and to protect the lives and safety of our seafarers, until the Red Sea passage is safe, MSC ships will not transit the Suez Canal eastbound and westbound,” MSC said in a customer advisory. “Already now, some services will be rerouted to go via the Cape of Good Hope instead.” MSC is the largest global container line as measured by ship capacity.

OOCL on Saturday said it would not accept cargo bound or from Israel, citing operational issues.

An increased presence by the US Navy is not a foregone solution, however, given the Houthi militia’s ability to keep launching barrages of drone attacks in the narrow Bab al-Mandab Strait at the southern entrance to the Red Sea, a geopolitical analyst familiar with the matter told the Journal of Commerce. Only Iran’s pulling back its support for the Houthi movement, or the eradication of the militia’s ground operation, would fully protect the waterway.

The Red Sea and Sea of Aden are monitored by the US Central Command, which regards the Bab al-Mandab Strait that links the Gulf of Aden and the Red Sea as a critical choke point for shipping. At its widest point between Djibouti in east Africa and Yemen on the southwestern Arabian peninsula, the strait is less than 13 nautical miles across, meaning commercial shipping is easily accessible to rebels launching speedboats from Yemen. Longer Cape of Good Hope option The rerouting of trade between Asia, the Middle East, Europe and North America around the Cape of Good Hope at the southern tip of Africa would require 1.45 to 1.7 million TEUs in additional capacity due to the longer sailings, according to Sea-Intelligence Maritime Analysis. For example, Singapore is some 8,300 nautical miles from Rotterdam via the Suez Canal, but an additional 3,500 nautical miles via an around-Africa routing, according to Sea-Intelligence. The latter also adds roughly 10 days of sailing time.

Unlike when the Ever Given became stuck in the Suez Canal for six days in March 2021, there’s plenty of container capacity globally at present, but far less certainty when the current situation could be resolved, Alan Murphy, CEO of Sea-Intelligence, said in a research note Sunday. With the use of the Suez in flux, the ability of container lines to reroute Asia-US services away from the Panama Canal has become further problematic given the draft and transit limitations through the drought-stricken isthmus.

The Panama Canal Authority (ACP) on Friday announced an easing of upcoming restrictions due to better-than-expected rainfall and enhanced water-saving efforts. The number of daily transits starting in January will now be 24, an increase from the ACP’s October announcement that it would restrict daily transits to 20 in January and 18 in February.

Ocean carriers of THE Alliance on Dec. 1 said they would halt Panama Canal transits through February for ships on three of their weekly container services between the US and Asia and re-route them through the Suez Canal.
· Contact Mark Szakonyi at mark.szakonyi@spglobal.com.