Red Sea Security Update - Global Supply Chain Impact

While the US-led international coalitions increase defensive measures in the Red Sea to intercept dozens of Houthi munitions and prevent hijackings, carriers continue to adjust their routes and 299 vessels are now rerouted towards the Cape of Good Hope. Approximately 18% of global shipping capacity is being affected. 

Concerns remain that the afore-mentioned security measures will not be sufficient for major shipping companies to resume Red Sea transits any time soon. 

Maersk, whose containership was struck by a missile over the weekend, initially paused all Red Sea and Suez Canal transits for 48 hours. Yesterday, they announced an extension of the pause until further notice and expressed the intention to resume Red Sea transits as soon as ‘operationally possible’. In the meantime, in cases where feasible, they are rerouting most vessels via the Cape of Good Hope until safety at the Red Sea is restored.

Similarly, Hapag-Lloyd and MSC have confirmed that their vessels will persist in rerouting via Africa until at least January 9th and until further notice. The unstable conditions continue to exert upward pressure on freight rates, insurance premiums and spot rate indexes, causing further disruptions and delays to global supply chains. 

We will continue to provide updates as the situation evolves. For any immediate questions or concerns, please contact us here.