Shipping giant reroutes vessels around Africa

Maersk had previously suspended its Red Sea route following Houthi attacks

Danish shipping group Maersk announced on Tuesday that its vessels due to transit the Red Sea and Gulf of Aden will be rerouted around Africa via the Cape of Good Hope due to the risk of attacks by Houthi militants from Yemen.

Maersk, along with other major freight companies, had previously paused travel via the southern entrance to the Red Sea – the Bab el-Mandeb Strait – because of security concerns.

The Bab el-Mandeb Strait connects the Red Sea to the Gulf of Aden, and then on to the Indian Ocean on one side and the Mediterranean Sea via the Suez Canal on the other. The waterway is a key route linking Asia and Europe, and facilitates roughly 12% of global trade, including 30% of all global container shipments.

The travel suspensions followed reports of at least two ships having been targeted with projectiles on Monday. Houthi leaders said they were pursuing Israel and all Israel-bound vessels due to hostilities in Gaza.

“The attacks we have seen on commercial vessels in the area are alarming and pose a significant threat to the safety and security of seafarers,” Maersk said in a statement, as quoted by CNBC.

The company added that it was monitoring the situation and had decided that all vessels currently on hold and previously scheduled to travel via the Red Sea would take the much-longer Cape of Good Hope route. The route reduces an Asia-Europe trip’s effective capacity by 25%, according to analysts at UBS.

READ MORE: More oil shippers halt passage via Red Sea due to rebel attacks

Maersk said its vessels would continue on diverted routes “as soon as operationally feasible,” adding that decisions on future journeys would be made on a case-by-case basis.

Meanwhile, industry experts have been raising concerns that the situation could further disrupt supply chains, driving up crude prices in Europe and the Mediterranean.

Find more stories on economy and finance in TROIB business