Maersk Resumes Operations in the Red Sea Following Security Operation

25 December 2023

Global shipping giant Maersk announces the resumption of operations in the Red Sea and Gulf of Aden after a suspension due to attacks by Iran-backed Houthi rebels.

Maersk, the world’s largest shipping company, has announced that it will restart operations in the Red Sea and Gulf of Aden. The Danish company had suspended its activities in the region following attacks by Iran-backed Houthi rebels on commercial vessels. The resumption of shipments comes as a new US-led security operation, Operation Prosperity Guardian, is established to safeguard the area. This development is seen as a positive step for the global trade industry and the functionality of international commerce.

Operation Prosperity Guardian ensures safe passage for shipping vessels

Operation Prosperity Guardian, a multinational security operation led by the United States, will provide security for shipping vessels passing through the Red Sea and Gulf of Aden. The operation includes the participation of countries such as the United Kingdom, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles, and Spain. With the establishment of this security operation, Maersk and other shipping companies can resume their operations in the region, ensuring the safe passage of goods and maintaining the functionality of global trade.

Attacks by Houthi rebels disrupt trade in the Red Sea

The decision to suspend operations in the Red Sea was prompted by attacks on commercial ships by Iran-backed Houthi rebels. These attacks were claimed to be in retaliation against Israel’s military campaign in Gaza. The suspension of operations by Maersk and other major companies, including BP, raised concerns about the impact on global trade. The Red Sea and the Suez Canal are crucial routes for approximately 10% to 15% of global trade and 30% of container trade. Rerouting ships around the southern tip of Africa would increase freight costs and delivery times, further affecting the global supply chain.

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Maersk’s response to the disruption

Maersk took swift action in response to the attacks and diverted its vessels away from the Red Sea. However, this led to increased transportation costs and longer routes for transporting goods. The company introduced new charges to accommodate the longer routes and mitigate the impact of the disruption. Maersk emphasized the importance of employee safety and stated that it would not hesitate to reevaluate the situation and initiate diversion plans if necessary. The resumption of operations is a positive development, but the company acknowledges that the overall risk in the area has not been eliminated completely.

The significance of the Red Sea and Gulf of Aden for global trade

The Red Sea and Gulf of Aden play a critical role in global trade, serving as a major shipping route connecting the Red Sea to the Mediterranean Sea. Approximately 10% to 15% of global trade and 30% of container trade pass through these waters. The disruption caused by the attacks on commercial ships by Houthi rebels had significant implications for the global supply chain. The resumption of operations by Maersk and other shipping companies will help alleviate concerns about increased freight costs and delivery delays.

Conclusion:

Maersk’s decision to resume operations in the Red Sea and Gulf of Aden is a positive development for global trade. The establishment of Operation Prosperity Guardian, a US-led security operation, ensures the safe passage of shipping vessels in the region. The attacks by Iran-backed Houthi rebels had disrupted trade in the Red Sea, leading to the suspension of operations by major companies. The resumption of operations will help restore the functionality of global trade and mitigate the impact on the global supply chain. However, the overall risk in the area has not been completely eliminated, and Maersk remains committed to prioritizing employee safety. The successful implementation of the new security operation and the resumption of operations by Maersk mark a significant step forward in maintaining the stability and efficiency of international commerce.

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