Shipowners Suspend Suez Canal Transits Amid Ongoing Threats in Red Sea
Recent attacks on commercial ships transiting the Red Sea, including a missile strike on a Norwegian chemical tanker, have led major shipping companies to halt operations along the critical trade route. Container giants like MSC, Maersk, CMA CGM and several others have opted to suspend Suez Canal transits and instead sail around the Cape of Good Hope, adding significant costs and nearly 10 extra days to each journey.
The diverted ships had been traversing the Red Sea and Bab al-Mandeb Straits en route to and from Asia via the Suez Canal. However, the persistent danger posed by rebel Houthi forces in Yemen launching strikes across the narrow passage has shipowners concerned. The latest victim, chemical tanker Swan Atlantic, was hit by a missile on December 18th but fortunately avoided casualties.
In response, the U.S. announced a new multi-national naval task force this week, dubbed Operation Prosperity Guardian, to protect commercial traffic in the region. Still, uncertainty remains over whether the coalition will be effective given the small area needing patrol and questions around the precise deployment of ships.
Shipping analysts caution that if insecurity continues, there could be lasting impacts on supply chains. Rerouting ships around Africa requires substantial additional fuel, up to $1 million per vessel according to Xeneta. The Danish consultancy also estimates an extra 1 million containers will need rerouting, likely leading rates to double. For now, an average of 100 ships still pass through daily, but avoidance is growing.
The decisive factor for shipowners will be gauging the on-the-water protection provided by Operation Prosperity Guardian once deployed. Understanding the rules of engagement and coverage procedures will determine if the U.S.-led task force can reestablish stability in the Red Sea. If not, operators may have no choice but to absorb soaring costs to maintain cargo flows on less efficient routes. Consumers around the world would ultimately bear the burden of such a long-term shift.
