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Maersk, Hapag-Lloyd signal Red Sea route return
Container carriers cite security assessments as Gemini Cooperation maps a gradual trans-Suez return
Key Takeaways:
- Maersk and Hapag-Lloyd said they are redirecting a southern Mediterranean-China service through the Red Sea and Suez Canal.
- The move signaled confidence in Red Sea security, sending shares lower on expectations shorter routes could ease capacity constraints and shipping rates.
- The Gemini Cooperation said the decision marks a step toward a gradual return to a trans-Suez network following Houthi ship attacks that started in late 2023.
A.P. Moller-Maersk A/S and Hapag-Lloyd AG signaled confidence about resuming passage through the Red Sea, sending the container carriers’ shares down on expectation a return to the shorter route will ease capacity constraints and temper a surge in shipping rates.
In July 6 statements, the two said they’re redirecting a service that links the southern Mediterranean with China through the Red Sea and Suez Canal — rather make the longer journey around Africa’s Cape of Good Hope. Maersk and Hapag-Lloyd operate a capacity-sharing alliance known as Gemini.
Maersk and Hapag-Lloyd rank Nos. 7 and 17, respectively, on the Transport Topics Top 50 list of the largest global freight companies.
The joint decision “comes following thorough assessments of the security situation in the Red Sea area,” according to the Maersk statement. “With this decision, the Gemini Cooperation takes a step towards a gradual return to a trans-Suez network.”
Copenhagen-based Maersk fell as much as 9%, the steepest decline since May 7, while Hapag-Lloyd, based in Hamburg, Germany, dropped as much as 4.6%, the most since April 2.
Under the plans, the first vessels to alter course on the Asia-Europe service will be the Majestic Maersk, which ship-tracking data compiled by Bloomberg shows is currently near Oman.
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Container vessels and other cargo ships have largely avoided the Red Sea since late 2023, when Yemen-based Houthis started attacking ships in solidarity with Palestinians during a conflict with Israel.
Some carriers were planning to return to the normal route earlier this year, but the Iran war sparked in late February revived threats to the maritime industry.
Taking a longer route around southern Africa to avoid conflict in the Mideast adds time and fuel costs and stretches capacity. That, plus robust demand heading into peak season for ocean freight, combined to send spot container rates surging in recent weeks.
