Container shipping rates spike as Red Sea crisis draws first blood

Maersk, the world’s second-largest ocean carrier, gambled that a U.S.-led military force, Operation Prosperity Guardian, would allow safe passage through the Red Sea. That gamble has failed.

On Tuesday, Maersk said it will suspend Red Sea transits indefinitely and reroute ships around Africa’s Cape of Good Hope. The decision followed attacks on the container ship Maersk Hangzhou, which was struck by a Houthi rebel missile on Saturday and threatened by four Houthi boats on Sunday.

Armed guards on the Maersk Hangzhou exchanged fire with the Houthis, whose boats approached within 70 feet of the container ship before U.S. military helicopters intervened. After the Houthis fired on U.S. forces, the helicopters took out three of the four boats, killing 10 Houthi rebels.

The attacks in the Red Sea continue. U.S. Central Command confirmed that the Houthis fired two anti-ballistic missiles on Tuesday that landed in the vicinity of passing commercial ships. The Houthi spokesperson confirmed Wednesday that the missiles were targeting the container ship CMA CGM Tage.

As supply chain issues mount and missile launches persist, there is increasing talk of ground strikes in Yemen by the U.S.-led coalition. The Pentagon has detailed plans on striking Houthi drone and missile bases, according to The New York Times. U.K. Defense Secretary Grant Shapps warned in an editorial in The Telegraph on Monday: “We won’t hesitate to take further action to deter threats to freedom of navigation in the Red Sea.”

Intensified military action in the Red Sea is causing container shipping spot rates and some container shipping stocks to surge.

Source: freightwaves.com