Red Sea attacks leave shipping companies with difficult choices

CAIRO : The shipping companies that move goods on one of the world’s busiest trade routes for factories, stores, car dealerships and other businesses face an excruciating decision.

They can send their vessels through the Red Sea if they are willing to risk attacks by the Houthi militia in Yemen and to bear the cost of sharply higher insurance premiums. Or they can sail an extra 4,000 miles around Africa, adding 10 days in each direction and burning considerably more fuel.

Neither option is appealing, and both raise costs — expenses that analysts said could ultimately be borne by consumers through higher prices on the goods they buy.

The Houthi attacks have continued even after a U.S.-led force was assembled in the Red Sea to prevent them.

The first vessel attacked by Houthi gunmen in recent weeks was a car carrier, the Galaxy Leader, which was hijacked Nov. 19 while returning to Asia for another load of several thousand cars. The 25-member crew, mainly Filipinos, was also kidnapped and still does not seem to have been released.

MSC, the largest container shipping company, said in mid-December that it was avoiding the Red Sea. Maersk, the second biggest, temporarily halted transits of the Red Sea then, returned to the area in late December and pulled back again this week after one of its vessels, the Maersk Hangzhou, was attacked.

CMA CGM, the French shipping company, said in statement that some of its vessels had traveled through the Red Sea and that it was planning for a gradual increase of passages through the Suez Canal. “We are monitoring the situation constantly, and we stand ready to promptly reassess and adjust our plans as needed,” it added.

Cosco, the Chinese giant, did not respond to a request for comment. A spokesperson for Hapag-Lloyd, which has a fleet of more than 250 container ships and is based in Hamburg, Germany, said the company planned to go around Africa until Jan. 9 and then assess the situation.

An analysis provided by Flexport, a logistics technology company, showed that as of Thursday, 389 container vessels, accounting for more than one-fifth of global container capacity, had already diverted from the Suez Canal or was in the process of doing so.