Many transport companies are avoiding the Red Sea where Yemen-based Houthis have attacked ships in support for Hamas in the conflict with Israel. But even ships without direct links to Israel have been targeted, and as the escalation of the war threatens global trade, a US-led task force is trying to bolster security on the key waterway.
Attacks in the Red Sea will cause shipping delays and drive up the price of goods, bringing a new inflation risk to the global economy@NewsAMorgan looks at what's going on https://t.co/6Bcco7jZkL pic.twitter.com/8Z2xqxBC3Z
Denmark’s A.P. Moller-Maersk A/S, the world’s second-largest container line, is one of the companies preparing to resume shipping through the Red Sea after initially sailing the long way south of Africa. Others are taking a more cautious approach: shipping giant Hapag-Lloyd AG confirmed on Friday it will continue to avoid the Red Sea and will review the decision on Jan. 2.
Data this week showed that half of the container-ship fleet that regularly transits the Red Sea and Suez Canal is avoiding the route. Diverting around Africa can take as much as 25% longer than using the Suez Canal shortcut between Asia and Europe, adding to costs that may ultimately be passed on to consumers. And it comes just as the other major trade shortcut, the Panama Canal, is suffering from drought, adding to the potential economic risks.
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Denmark’s government said on Friday the Nordic country will send a warship to the Red Sea to participate in the US-led mission. The vessel, which will be of the frigate class, is expected to arrive in the area at the end of next month, according to a statement from the ministry of defence in Copenhagen.
