Maersk Is Ready To Resume Red Sea Service! But Rates Won't Come Down Before The Year Is Out.

On December 24, local time, global shipping giant Maersk released a statement saying it was preparing to resume shipping operations in the Red Sea and Gulf of Aden due to the deployment of a joint U.S.-led convoy operation.

This follows Maersk's announcement on Dec. 15 that it was suspending the passage of its vessels through the Bab-el-Mandeb Strait due to attacks on its ships. The Houthi attacks led to severe disruptions in shipping through the Suez Canal and the Red Sea, one of the most important arteries for the trade of oil, gas, grains, and consumer goods between Europe and Asia.

In a statement, Maersk said, "As of December 24, we have received confirmation that the previously announced 'Guardians of Prosperity' (OPG) multinational security initiative has been formalized and deployment has begun. Maritime trade through the Red Sea and Gulf of Aden is able to take place, and the Suez Canal can once again be activated as the gateway to Asia and Europe." "With the implementation of the 'Guardians of Prosperity' initiative, we are preparing to allow ships to resume navigation through the Red Sea in both directions, east and west."

Maersk said it would announce more details in the coming days. But the company noted in a customer advisory that "the overall risk in the region has not been eliminated" and that it could "initiate the rerouting program" again if further security concerns exist.

Previously, Maersk announced on December 15 that it was suspending its vessels through the Bab-el-Mandeb Strait due to an attack on its ships, and on December 19, Maersk said it would use a route around the Cape of Good Hope and would impose a container surcharge on cargo from Asia to cover the extra cost of the increased mileage.

Industry insiders said that Maersk needs to restore the Red Sea route, but there are still uncertainties. Even if the recovery is also a planned batch of gradual recovery, which has a complex structure, the delay is serious, and the shipping service network still has a long-term impact. And the current ship schedule is still insufficient; container freight seems to be in the short term; there is no sign of rapid decline.

In terms of spot rates, take the Shanghai to Rotterdam route as an example. Although at the end of December this year, there are still shipping companies quoting only US$2,000/FEU, with the highest quote of US$4,000/FEU, from January next year, the freight rate has increased significantly. Specifically, ONE's voyage departing on January 11 next year has the lowest price of US$4,725/FEU, while the price of a Mediterranean shipping voyage departing on the same day is as high as US$8,040/FEU.

A freight forwarder said, "In considering the normal situation, due to the Chinese Lunar New Year factor, many factories are basically on vacation after the middle of the year and shipments are concentrated. The shipping schedule is tight before the year, especially in the first half of January, so it is unlikely that the freight rates will fall back before the year."

Some institutional sources said Maersk's return to the Red Sea is considered a disturbance to the market. Although the short-term will have an impact on the mood, the Red Sea situation still continues to be tense. The follow-up also needs to pay attention to how many liner companies will follow Maersk back to the Red Sea.

Maersk said the company wants to bring greater predictability and supply chain efficiency to its customers and will confirm details related to the next phase of operations as soon as possible.

"While security measures to ensure that ships can pass through the Red Sea (Gulf of Aden area) are currently in place, the overall risk in the area has not been eliminated at this stage. Maersk will not hesitate to reassess the situation and initiate the detour plan again if the safety of the crew is at risk." Maersk said.