SECURITY CONCERNS LEADING TO CARRIER SERVICE SUSPENSIONS IN RED SEA

Recent weeks have seen the targeting of commercial vessels as they transit or approach the Red Sea by armed groups in Yemen. These attacks have included hijackings and attempted missile and drone strikes – some of which were successful. Several major carriers have suspended service in the region following several security incidents involving Maersk, MSC, and Hapag-Lloyd vessels off the Arabian Peninsula.

Maersk Line has stopped sailings through the Bab al Mandeb Strait – the chokepoint off the coast of Yemen linking the Gulf of Aden to the Red Sea. The strait serves as the southern entrance to the Red Sea – a vital access point for vessels transiting to or from the Suez Canal and any vessels calling the key ports of Jeddah, Port Sudan, and Aqaba.

Hapag-Lloyd has similarly suspended service through the Red Sea through at least Monday. MSC and CMA CGM have also been reported to have suspended Red Sea operations.

These developments will have implications not only for any vessels calling Red Sea ports but also for any vessels transiting the Suez Canal. Increased transit times and blank sailings should be expected.

Considering the persistent transit delays impacting the Panama Canal due to drought, service restrictions that limit access to the Suez Canal will leave the world’s two main passageways for trans-hemispheric shipments obstructed. This will lead to extended transit times and upward pressure on rates across trans-hemispheric services – such as services from Asia and the Middle East to the Americas and Europe.

Additionally, if other petroleum carriers follow the course of BP and suspend vessel operations in the Red Sea, there may be implications for global fuel prices as the transportation cost of oil climbs.

Falcon is closely monitoring these developments and is working with customers on contingency planning as necessary.

Please monitor Falcon newsfeeds for developments.