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. Following several security incidents involving Maersk, MSC, and Hapag-Lloyd vessels off the Arabian Peninsula, several major carriers have suspended service in the region.
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, as well as any vessels calling the key ports of Jeddah, Port Sudan, and Aqaba.
These developments will have implications not only on any vessels calling Red Sea ports, but 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 transhemispheric shipments obstructed. This will lead to extended transit times and upward pressure on rates across transhemispheric 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 on global fuel prices as the transportation cost of oil climbs.
Compass is closely monitoring these developments and is working with customers on contingency planning as necessary.
Please monitor Compass newsfeeds for developments.