Logistics

Shipping giants not yet ready to resume Red Sea route

January 24, 2025, 7:24 PM

Members of the crew of the Bahamas-flagged vessel Galaxy Leader following their release by Yemen's Iran-aligned Houthis

Houthis scaling back hostilities
Response to ceasefire in Gaza
Adnoc and Maersk wary of danger

Two shipping giants said on Friday that they are in no rush to resume routes through the Suez Canal after a Yemeni militia announced earlier this week it will scale back hostilities against vessels transiting through the Gulf of Aden and Red Sea if the ceasefire in Gaza holds.

Danish shipper Maersk and Abu Dhabi National Oil Company’s logistics division welcomed the Houthis’ pledge as a “step in the right direction” but said they will continue to divert cargoes around Africa as the risk to their ships remains too high, according to reports from Reuters.

“With this in mind – and the safety of our crew, vessels and your cargo being our utmost priority – Maersk will continue to sail around Africa via the Cape of Good Hope until safe passage through the area is ensured for the longer term,” the company said.

Since the war in Gaza began in late 2023, as Israel responded to Hamas’s October 7 attacks, the Houthis have subjected ships passing through the Bab-el-Mandeb Strait to a barrage of attacks, regardless of nationality.

On Wednesday, the Iran-backed militia freed the 25-member crew of a Bahamas-flagged ship, the Galaxy Leader, that they hijacked in November 2023.

Days earlier, on Sunday, as the US-brokered ceasefire between Israel and Hamas went into effect, the Houthi rebels said they would limit future assaults to vessels flying the Israeli flag or owned by Israeli nationals or companies, as long as the terms of the truce are met.

Over the past 14 months, the Houthi offensive in the Red Sea has disrupted global trade, causing shipping delays and price rises. Their recent announcement has sparked hopes that traffic might go back to normal soon.

Egypt’s investment and foreign trade minister Hassan El-Khatib said on Thursday that officials were “cautiously optimistic” about the ceasefire and plan to talk to shipping companies about returning to the Suez Canal, which has seen revenues drop between 60 to 70 percent since the crisis began.

But he acknowledged in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland, that there is not going to be “an immediate switch back” to the Egyptian shipping channel.

Adnoc Logistics & Services’s CEO, Abdulkareem Al Masabi, told Reuters on Friday that it was too early to say the problem was “almost completely gone”.

“As I said, there is a people side of it, so we cannot risk our people going there while there is maybe a fragile ceasefire now,” he said.

Last week, after the Israel-Hamas deal was announced but before it went into effect, Suez Canal officials said an ongoing expansion of the waterway was proceeding apace and should become operational before the end of March.