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Challenges Affecting Shipping Trade Routes in the Red Sea Region

Challenges Affecting Shipping Trade Routes in the Red Sea Region

Red Sea Update

15th of January 2024

  • On Jan. 15 at approximately 4 p.m. (Sanaa time), Iranian-backed Houthi militants fired an anti-ship ballistic missile from Houthi-controlled areas of Yemen and struck the M/V Gibraltar Eagle, a Marshall Islands-flagged, U.S.-owned and operated container ship. The ship was unharmed and continued its journey after an anti-ship ballistic missile failed and landed in Yemen with no reported injuries or damage.
  • According to reports from both Bloomberg and Reuters, QatarEnergy, the second-largest exporter of LNG in the world and a major supplier to Europe, has made the decision to halt all transits of the Red Sea. This decision comes at a critical time as Europe is currently in the peak period of its winter months. Qatar plays a significant role in supplying LNG imports to the UK, accounting for a third of their imports. Additionally, countries like Germany and Finland have established LNG import terminals to compensate for the loss of Russian gas.
12th of January 2024
  • The international community continues to closely monitor the situation in the Red Sea and the global response following the joint military action by the United States and United Kingdom, with support from international allies. This decisive strike was executed in response to the militant rebels' repeated warnings and more than 27 attacks on commercial shipping.
  • Most containerships have already changed course away from the Red Sea, opting to reroute around Africa instead. Container xChange, a reputable source, reports that around 500 out of the 700 scheduled containershipsristian Roeloffs, the current disruptions in the shipping industry are a cause for concern due to the increasing demand for containers in Asia. Shippers and forwarders are anticipating a surge in cargo demand in the upcoming weeks, as they strive to fulfill orders before the arrival of the Chinese New Year.
  • However, the warnings are now being expanded to encompass other sectors such as bulk shipping, oil transport, and gas shipments, which have mostly experienced minimal effects so far.
  • Subsequently two (2) car manufacturers also announced production delays:
    • TESLA announced that production at the German Factory will be suspended for 2 weeks until February 12, 2024.
    • Volvo will be closing their factory in Belgium for 3 days due to delayed parts deliveries; moves come after US, UK hit militants in Yemen over attacks on shipping in key waterway.

10th of January 2024

  • The militants in the area indicated on Wednesday that the group had fired a "large number" of missiles and drones at a U.S. ship "providing support" to Gaza.
  • Tuesday's strikes marked the 26th such militant attack on Red Sea shipping lanes since 19 November 2023 as reported by CENTCOM.
  • Ocean freight rates have surged due to diversions around the Red Sea according to announcements by various shipping lines. The diversions have raised fears of another prolonged disruption to global trade just as supply chains unsnarl after the COVID pandemic. Going around southern Africa instead adds $1 million in fuel costs and about 10 days to the journey.
  • Asia-to-Europe and Asia-to-North America rates have more than doubled since the start of the crisis, and the impact has been worsened by the drought affecting the Panama Canal. The Asia-to-North America route is not typically dependent on the use of the Suez Canal, but the drought has placed an increased reliance on the Red Sea route for US East Coast bound shipments from Asia. 
  • Some transport and logistics firms are increasing their use of intermodal transport to reach the US East Coast as a result, increasing rates on the route by 63%.
  • This could, potentially, result in see a surge in demand in the air freight industry to mitigate the impact of the Red Sea disruption on deliveries bearing in mind that Chinese New Year coming up on 10 February 2024 is further putting pressure on already difficult situation.
  • The number of container ships passing between the Red Sea and the Suez Canal has dropped 90% in the first week of January, compared to the same week last year. Research by shipping services firm Clarksons also showed that the number of vessels diverting to the Cape of Good Hope on January 9 more than doubled since December. 
  • According to data analytics firm Everstream Analytics, redirecting vessels around the Cape is expected to increase the cost of fuel up to $1m (£786,000) for every round-trip voyage between Asia and northern Europe. In total, $200 billion in trade has been diverted from the Red Sea since November, according to the insights firm. Everstream expects global container shipping capacity, which currently totals a combined 24.6m TEUs, to be reduced by 10-15% as a result.

9th of January 2024

  • Multiple missiles and drones fired in the direction of commercial vessels in the Red Sea were launched from militant controlled areas of Yemen on Tuesday night. There were no reports of damage or injury though.
  • Eighteen drones, two anti-ship cruise missiles and one anti-ship ballistic missile that were fired at about 9:15 p.m. US time by militant rebels were successfully shot down.
  • It appears as if there isn’t clarity as to what the drones and missiles were targeting, but there were several commercial ships in the area. 
  • A total of 257 vessels have been rerouted from the Red Sea, with only five vessels still drifting, according to supply chain visibility provider Project44’s most recent report, which was last updated yesterday. 
  • Vessel ETA predictions are showing that the majority of impacted vessels will experience between seven and 20 day increases in transit time, depending on speeds travelled. Some of the vessels that are rerouting around Africa have increased their speeds to help mitigate delivery delays, but this means more fuel is being used, prompting further concern about increasing shipping prices.
  • The volume of container vessels travelling through the Suez Canal has greatly reduced since the militant attacks, from an average of 15 vessels per day previously to just 5.8 vessels per day this past week. 
Editors Note :  This post was originally published on 8 January 2024 and has been updated for accuracy, relevancy and comprehensiveness.


In this overview conducted by the Ziegler One administrative team, we strive to present a detailed and organized summary of the responses from different commercial shipping lines regarding the recent militant activity in the Red Sea Region.

By offering this detailed and regularly updated overview, Ziegler One aims to provide stakeholders, industry professionals, and the wider public with a nuanced understanding of the measures taken by commercial shipping lines in response to the complex security challenges prevailing in the Red Sea Region. The summary tracks trends, evaluates strategies, and promotes dialogue on developments in the Red Sea Region.  

What is your opinion on the alternatives chosen by the shipping lines?

Receiving feedback will enable us to come together as agents, as ultimately all of these developments have an impact on the freight forwarding industry.

8 January 2024:

  • A spokesperson for Hapag-Lloyd, which has a fleet of more than 250 container ships and is based in Hamburg, Germany, said the company planned to go around Africa until Jan. 9 and then assess the situation.
  • According to Israeli media, the Chinese state-owned shipping giant Cosco is now also suspending shipping to Israel through the Red Sea as tensions in the strategic shipping lane continue to mount. The specifics of Cosco’s decision remains undisclosed, according to Israeli financial news outlet Globes.

6 January 2024:

  • Despite the repeated ultimatums from the international community for the attacks against merchant ships in the Red Sea area to stop, there were two new incidents reported on Saturday, January 6. Coalition forces intervened in both incidents with no merchant ships being harmed, but the continued fears are still impacting operations.
  • British maritime security firm Ambrey has received a report of a maritime security event in the Red Sea’s Bab al-Mandab area, the firm says in an advisory note, without elaborating. The firm advised crews to minimize deck movements and only essential crew should be on the bridge.

5 January 2024:

  • Since November, at least 25 commercial vessels operating in the southern Red Sea and the Gulf of Aden have been attacked. Last month, the United States launched a multinational operation to safeguard commerce in the Red Sea. However, due to continued attacks, many shipping companies are still diverting vessels around Africa.
  • Container shipping giant Maersk has announced it will divert all vessels around Africa instead of using the Red Sea and the Suez Canal for the “foreseeable future”. Maersk said on Friday, 5 January 2024 that the decision was due to the volatile situation in the Red Sea as Yemen’s Houthis continue to attack vessels that pass through the busy waterway. Maersk will divert all vessels around Africa instead of using the Red Sea and the Suez Canal due to the volatile situation in the Red Sea. This decision will add about 10 days to journey times and increase shipping costs. The security risk in the area remains significantly elevated, according to Maersk.

3 January 2024:

  • The Red Sea disruption comes as the Panama Canal, which has low water levels caused by drought, has slashed the number of vessels that can pass through. That had forced many ships to choose a longer route to the United States via the Suez Canal.
  • The crisis has set back available shipping routes by more than a century. When it began operating in 1914, the canal provided an alternative to the Suez Canal, the Cape of Good Hope and the Strait of Magellan to send goods between the Northern and Southern Hemispheres. Shippers are now returning to all three options to avert bottlenecks in Panama, although vessels have recently diverted from the Suez to avoid militant activity in the region. While the Suez is a sea-level canal, the Panama is a freshwater channel reliant on artificial lakes, making it vulnerable to drought.
  • In addition to that, the route around the Southern tip of Africa comes with its own set of problems as South African ports were badly congested since November 2023. On the up side, Transnet reported that - despite challenging weather conditions, including 100 kilometers per hour strong winds and intense swells at South African ports in recent weeks - the Durban Container Terminal Pier 2 has successfully decreased the number of vessels awaiting entry from 20 to five since November, as reported by Transnet Port Terminals.  Durban vessel ETA's can be found here.
  • On the same date a coalition of 12 countries (United States, Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, Netherlands, New Zealand, and the United Kingdom), led by the US, demanded an immediate end to the illegal attacks and release of detained vessels and crews, with warnings of consequences. The Red Sea, connecting the Mediterranean to the Indian Ocean and Europe to Asia, is a vital trade route, accounting for about 12% of world trade according to the International Chamber of Shipping.

2 January 2024:

  • Despite an attack on one of its Red Sea vessels, Maersk will continue with over 30 container vessels through the Suez Canal and Red Sea, with some routes temporarily suspended due to the risk of militant attacks. Plans for each vessel are evaluated individually, with some choosing the Suez route and others opting for the longer journey around Africa. Maersk's partner, Mediterranean Shipping Company (MSC), continues to divert all vessels via the Cape of Good Hope.
  • German rival Hapag-Lloyd said on Tuesday their container ships would continue to avoid the Red Sea route that gives access to the Suez Canal following a weekend attack on one of Maersk’s vessels.
  • Both shipping giants have been rerouting some sailings via Africa’s southern Cape of Good Hope as Yemen-based Houthis attack cargo vessels in the Red Sea. The disruption threatens to drive up delivery costs for goods, raising fears it could trigger a fresh bout of global inflation.
  • MSC did not immediately respond to a request for comment.
  • The Israeli military confirmed on Monday,1 January 2024 that it was withdrawing thousands of troops from the Gaza Strip which could potentially bring stability to the region and movement via the Suez Canal.
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