The global shipping industry is bracing for the prospect of living without its most important trade route for weeks.
The world’s biggest container shipping companies have paused transit through one of the world’s trade arteries, which experts say could snarl supply chains and drive-up freight costs.
Maersk as many other shipping giants has decided that all vessels previously paused and due to sail through the region will now be re-routed around Africa via the Cape of Good Hope for safety reasons.
Shippers are sending vessels the long way around Africa, adding up to 10 days sailing time on an Asia to North Europe or East Mediterranean service.
Some ocean freight liner operators may feel this is the best option given the risk to their vessels and crews in the Red Sea and Gulf of Aden.
Alexander Saverys, Euronav CEO, in a live interview in Bloomberg tv discussed what it would take to bring its ships back to the Red Sea amid the ongoing attacks.
“It will slow down the trade because we will have to wait for a convoy to pass through the region,” Euronav Chief Executive Officer Alexander Saverys said in an interview with Bloomberg TV. The oil tanker giant has halted all shipments via the Red Sea and won’t go back until such military escorts are in place.
“As long as we don’t see the convoys that could protect our vessels, we will continue avoiding the area. The governments need to step in with the navy to protect our commercial vessels. We are having discussions with all our flag states, as our vessels have different flags, for the security measures. It is still allowed to go through the area.”
US warships in the Red Sea have been battling a growing number of weapons fired by Houthi forces in Yemen over the past several weeks.
U.S. Defense Secretary Lloyd Austin on Monday announced the creation of a multinational operation to safeguard commerce in the Red Sea following a series of missile and drone attacks by Yemen’s Iran-aligned Houthis.
The Pentagon hasn’t yet detailed how the so-called Operation Prosperity Guardian will protect ships.
The new multinational security initiative, Operation Prosperity Guardian, will work under the umbrella of the Combined Maritime Forces and the leadership of its Task Force 153, which focuses on security in the Red Sea.
Austin, who is in his fourth trip to Israel as Secretary of Defense, said participating countries include the United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain.
Experts say those details may delay the time it takes for the security situation to be brought under control.
