Maersk returns to Red Sea but Hapag-Lloyd says 'too dangerous'

(Sharecast News) - Shipping giant Maersk on Wednesday said it would operate several dozen container vessels via the Suez Canal and the Red Sea in the coming days and weeks despite recent attacks on vessels by Yemen's Houthi militant group. Container companies stopped using the Red Sea routes after the attacks, with some suspending services or taking longer routes to port to avoid the troubled area. Maersk's share price fell 5% on the news as a resumption of shorter routes would likely lead to a change in freight rates.

Maersk said its decision to resume travel through the Red Sea was based on the deployment of a US-led military operation to protect vessels against Houthi attacks.

However, Germany's Hapag-Lloyd said it still considered the route "too dangerous", and would continue to reroute ships via the Cape of Good Hope - adding 3,500 nautical miles to the journey. A spokesperson added that it will review its decision on Friday.

France's CMA CGM on Tuesday said it was increasing the number of vessels travelling through the Suez Canal.

Rerouting means extra fees for customers and weeks to the time it takes to transport goods from Asia to Europe and to the east coast of North America.

Maersk last week said it would add charges of $700 for a standard 20-foot container travelling from China to Northern Europe, consisting of a $200 transit disruption surcharge and a $500 peak season surcharge.

Some ships using the Red Sea, with Yemen to its south, have come under attack from drones and rockets by Houthi rebels. In response, more than a dozen countries have joined a US coalition called Prosperity Guardian to try and protect commercial shipping in the area, which is vital for the transport of consumer goods, oil and liquefied natural gas shipments.

Reporting by Frank Prenesti for Sharecast.com