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Denmark’s Maersk to divert around Red Sea for foreseeable future

Shipping giant Maersk said Friday that it would divert all vessels around Africa instead of using the Red Sea and Suez Canal for the "foreseeable future" after Yemeni rebels attacked its merchant ships.

Denmark's Maersk to divert around Red Sea for foreseeable future
File photo of a Maersk container vessel. The shipping giant is to divert around the Red Sea. Photo: Rene Van Quekelberghe/Reuters/Ritzau Scanpix

The Danish company cited the highly volatile situation and noted that the security risk remains high.

“We have therefore decided that all Maersk vessels due to transit the Red Sea/Gulf of Aden will be diverted south around the Cape of Good Hope for the foreseeable future,” it said in a statement.

On Tuesday, the shipping giant said it would not resume passage on the route “until further notice” after putting it on hold over following an attack on the Singapore-flagged Maersk Hangzhou.

On Sunday, the Denmark-owned and operated container vessel, which was travelling from Singapore to Port Suez in Egypt, reported being struck by a missile while transiting the Bab al-Mandab Strait.

It was then attacked by four ships operated by Yemen’s Iran-backed Huthi rebels, which “engaged fire in an expected attempt to board the vessel”, the Danish shipping company said.

The US military said navy helicopters sank three of the ships while the fourth fled.

Since November 18th, 25 commercial vessels operating in the southern Red Sea and Gulf of Aden have been attacked.

On Wednesday, 12 nations — led by the United States — jointly urged Yemen’s Huthi rebels for an “immediate end of these illegal attacks and
release of unlawfully detained vessels and crews,” while warning of “consequences”.

With 12 percent of world trade passing through it, according to the International Chamber of Shipping (ICS), the Red Sea is a “crucial waterway” linking the Mediterranean to the Indian Ocean, and hence Europe to Asia.

Some 20,000 ships pass through the Suez Canal every year, the gateway for ships entering and leaving the zone.

This is the second time that Maersk has suspended shipping through the strait.

In mid-December, like other global shipping giants, the Danish company halted passage of its ships through the route, following attacks by the Huthi rebels in Yemen.

It announced it would resume shipping on December 24th, only to suspend traffic again on December 31st, one week later.

The Huthis have repeatedly targeted vessels in the vital Red Sea shipping lane.

They say the strikes are in solidarity with Palestinians in war-ravaged Gaza, which Israel has bombarded relentlessly for three months, in what it says is a campaign to destroy militant group Hamas.

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BUSINESS

Maersk profits plummet as Yemeni attacks close off Red Sea route

Danish shipping giant Maersk posted a huge drop in net profit for the first quarter on Thursday as Yemeni rebel attacks are forcing it to avoid the vital Red Sea route.

Maersk profits plummet as Yemeni attacks close off Red Sea route

Maersk reported a net profit of $177 million in the first three months of the year, a 13-fold drop from the same period last year. Turnover fell 13 percent to $12.4 billion, slightly lower than forecast by analysts surveyed by financial data firm FactSet.

The company, however, raised its outlook for the full year, citing higher demand and increased rates and costs due to the supply chain disruptions in the Red Sea.

It now expects an underlying core profit ranging between $4 billion and $6 billion, up from $1 billion-$6 billion previously.

“We had a positive start to the year with a first quarter developing precisely as we expected,” Maersk chief executive Vincent Clerc said in a statement.

“Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched,” he said.

“This not only supported a recovery in the first quarter compared to the previous quarter, but also provide an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year.”

Iran-backed Huthi rebels, who control the Yemeni capital Sanaa and much of the country’s Red Sea coast, have launched dozens of attacks on ships since November, claiming solidarity with Palestinians caught up in the Israel-Hamas war.

The United States in December announced a maritime security initiative to protect Red Sea shipping from the attacks, which have forced commercial vessels to divert from the route that normally carries 12 percent of global trade.

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