MSC, the largest shipping carriers in the world, joins shipping giants Hapag-Lloyd and Maersk in travel pause at Red Sea amid attacks. MSC, largest shipping carrier in the world , said it is no longer traveling through the Suez Canal after its container ship, the MSC PALATIUM III, was attacked Friday while transiting the Red Sea under a subcharter to Messina Line.
“Due to this incident and to protect the lives and safety of our seafarers, until the Red Sea passage is safe, MSC ships will not transit the Suez Canal Eastbound and Westbound. Already now, some services will be rerouted to go via the Cape of Good Hope instead.”
MSC, Hapag-Lloyd and Maersk announcement
This announcement by MSC follows the announcement by Hapag-Lloyd and Maersk for pause of Red Sea and Bab al-Mandeb Straight travel by shipping giants, following a series of attacks on their vessels by Iranian-backed Houthi militants from Yemen.
Maersk, the world’s second-largest container shipping company, moves 14.8% of the world’s trade. It said it would divert ships away from the Red Sea.
As per a Maersk spokesman said the Danish company is deeply concerned about the highly escalated security situation in the southern Red Sea and Gulf of Aden. The recent attacks on commercial vessels in the area are alarming and pose a significant threat to the safety and security of seafarers, the spokesman added, saying that employees’ safety is the company’s top priority.
Maersk said it would release more details about potential next steps in the coming days.
As per Hapag-Lloyd, which controls about 7% of the global container ship fleet, it will “pause all container ship traffic through the Red Sea until Monday. Then we will decide for the period thereafter.”
Suez canal transit
Approximately 12% of the world’s trade, which includes 30% of all global containers, move through the Suez Canal. That then feeds through the Red Sea and Bab el-Mandeb. The significance of the Suez Canal was thrust into the spotlight in March 2021, when the container ship Ever Given was stuck for six days.
MSC, Hapag Lloyd, and Maersk market share
The collective vessel market share of MSC, Hapag Lloyd, and Maersk is approximately 40% of global trade. The decrease in vessel transits by MSC, Hapag Lloyd, and Maersk will be a financial hit to Egypt, which owns, operates, and maintains the Suez Canal. The Suez Canal Authority (SCA) announced a record $9.4 billion was generated in the 2022-2023 fiscal year. Increasing Suez Canal transit fees and tourism revenue play a crucial role, in Egypt’s struggling economy.
Increase in transit fees
The SCA announced in October it would increase transit fees in mid-January by 5%-15%. The Suez Canal was seeing additional vessels transiting the waterway as vessels were diverting away from the Panama Canal due to drought restrictions.
World Shipping Council on the attack
In response to Friday’s attacks, in which three vessels were attacked, the World Shipping Council said it is deeply alarmed and concerned about the escalating crisis, and that it’s calling for decisive action to protect seafarers.
“The right of freedom of navigation stands as a fundamental right under international law, and must be safeguarded,” the council said. “The time for resolute international engagement is now.”
The U.S. government has been in discussions with countries of the 39-member Combined Maritime Forces to form a maritime task force to “ensure safe passage” of ships in the Red Sea.
