A similar action was taken by the French company CMA CGM one day after the Danish shipping giant Maersk and the German transport company Hapag-Lloyd chose to cease their operations in the Red Sea.
The decision was made in response to strikes carried out in Yemen by Houthi rebels supported by Iran.
Ships that are in route to Israel are reportedly the target of their attacks.
As a result of Israel’s military operation in Gaza, which was initiated in response to the Hamas attacks that occurred on October 7 and resulted in the deaths of 1,200 people and the kidnapping of 240 more, the Houthis have announced their affiliation with Hamas.
According to Hamas health officials, Israel has been responsible for the deaths of more than 18,000 Palestinians in Gaza during that time.
Oil and gasoline shipments are among the most important routes in the world, and the Red Sea is one of those routes.
However, the Houthis have been increasing the strength of their strikes, employing drones and missiles to target vessels that are controlled by foreign entities.
Additionally, they have begun launching missiles and drones in the direction of Israel. On Saturday, the United States announced that its guided-missile destroyers had successfully destroyed fourteen drones belonging to the Houthi group in the Red Sea.
MSC stated in its announcement that the situation in the region has changed to a “serious” state.
An attack was carried out on the container ship MSC PALATIUM III on Friday while it was traveling through the Red Sea, according to the statement. Although the crew did not sustain any injuries, the ship was pulled out of service as a result of the incident.
The Cape of Good Hope, which is located at the southernmost point of Africa, was being used as a new route for its ships.
CMA CGM, the third-largest shipping firm in the world, issued a statement in which it stated that it has told all of its container ships in that region “to reach safe areas and pause their journey in safe waters with immediate effect until further notice.”
“alarming” is how Maersk, the world’s second-largest shipping company, has described the current scenario for the company.
“Following the near-miss incident involving Maersk Gibraltar yesterday and yet another attack on a container vessel today, we have instructed all Maersk vessels in the area bound to pass through the Bab al-Mandab Strait to pause their journey until further notice,” the shipping company told the BBC on Friday.
According to shipping experts, the decisions that have been made by the four businesses who have now ceased operations in the region are likely to be very expensive. These four companies are among the top five globally in terms of revenue.
In addition to the insurance coverage, it is a matter of safety for the crew as well as the ship itself. According to Sue Terpilowski, who works for the Chartered Institute of Logistics and Transport, which is an organization that represents businesses that are concerned with supply chains, premiums are now going sky high, and if they are able to get insurance at all, it is going to have serious implications on stock levels, on costs, and on the entire dynamics of supply chains.
A business writer for the BBC named Vivienne Nunis believes that the additional costs associated with crewing, gasoline, and insurance are likely to be passed on to customers.
In addition to being referred to as the Gate of Tears, the Bab al-Mandab Strait is a channel that is twenty miles (32 kilometers) wide and is notorious for being extremely hazardous to sail.
Yemen, which is located on the Arabian Peninsula, and Djibouti and Eritrea, which are located on the African coast, are its neighbors.
It is the path that ships take in order to arrive at the Suez Canal from the south, which is a significant shipping lane in and of itself. In order to avoid it, warships will have to take additional routes that are significantly longer, such as circumnavigating southern Africa.
On an annual basis, around 17,000 ships and ten percent of the world’s trade pass through it. This is the route that must be taken by any ship going through Suez on its way to or from the Indian Ocean.