Hijackings, missile strikes and drone assaults on ships by Yemen’s Houthi rebels have forced one of the The world's largest shipping group, Mediterranean Shipping Company (MSC), to divert its ships away from the Red Sea because of an increased threat of attacks. Other Shipping Lines, Danish shipping giant A.P Moller-Maersk -- which also accounts for 15% of the global container freight market -- suspended voyages passing through the Bab al-Mandeb until further notice.
Hapag-Lloyd on the other hand -- which controls 7% of the container market -- also paused traffic through the Red Sea until at further notice.
French company CMA CGM took a similar step a day after
Their decisions, announced on Friday, are a sign that major corporations are taking the security situation in the Red Sea increasingly seriously. But the consequences might also be felt by the world’s oil markets and the cost of energy that consumers need to bear – though the extent of any disruption might depend on how major global players respond to the looming crisis, said experts.
The decision comes after Israel was accused of a genocide in Gaza, Palestine by Houthi rebels in Yemen, who are said to be targeting ships travelling to Israel. The Houthis have warned that they will target ships sailing off the coast of Yemen and with links to Israel, in response to the war between Israel and the Palestinian Islamist movement Hamas in the Gaza Strip.
The ongoing conflict in the Middle East had already caused some carriers in the past few weeks to avoid the Suez Canal in the interest of security, with the accumulation of attacks from Yemeni rebels leading liner companies to re-route ships via the Cape of Good Hope (CGH) to avoid hostilities impacting container ship traffic in the Red Sea.
Zim Integrated Shipping Services (Zim Lines) - an Israeli carrier based in Haifa, that has since been dismissed from several ports, including Malaysia -- has increased freight rates on its Asia-Mediterranean service to cover the rising costs of securing its vessels. Other Affiliates of Zim Line follow suit.
Meanwhile, On the Arctic Side, Russian nuclear agency ROSATOM said recently it has set up a joint venture with Dubai's DP World to develop container shipping through the Arctic as part of an initiative heavily promoted by Russia President Vladimir Putin.
The deal with one of the world's top port operators is the most tangible sign yet of Moscow's ability to attract big international partners to help it realise its ambitious plans for what it calls the Northern Sea Route.
Putin has talked up prospects for the Arctic corridor, including in a speech at China's Belt and Road, as Russia shifts its trade eastwards in response to Western sanctions over the war in Ukraine as well as the Red Sea Corridor getting shut.
The route, made viable by the melting of Arctic sea ice due to climate change, runs from Murmansk near Russia's border with Norway to the Bering Strait near Alaska.
