Red Sea crisis: Missile attacks prompt Maersk subsidiary to halt transits, as emissions surge due to rerouting

Two U.S.-flagged containerships, Maersk Detroit and Maersk Chesapeake, operated by Maersk Line, Limited, a U.S. subsidiary of A.P. Moller-Maersk, were targeted by anti-ship missiles while transiting the Bab el-Mandeb on January 24, 2024.

The attacks were confirmed by Maersk saying that the two vessels were part of ‘a scheduled U.S. Navy accompaniment for a northbound transit of the Bab el-Mandeb‘ as they were carrying U.S. military supplies.

 Specifically, the vessels are enrolled in the Maritime Security Program and VISA (Voluntary Intermodal Sealift) with the U.S. Government. 

“While enroute, both ships reported seeing explosions close by and the US Navy accompaniment also intercepted multiple projectiles. The crew, ship, and cargo are safe and unharmed. The US Navy has turned both ships around and has escorted them back to the Gulf of Aden,” Maersk said in a statement to Offshore Energy.

  ”The safety of our crews is of utmost importance. Following the escalation of risk, MLL is suspending transits in the region until further notice. We are developing network contingencies and will keep you informed.” 

According to the U.S. Central Command, the Maersk Detroit was targeted by anti-ship ballistic missiles fired by Houthi forces from Yemen.

“One missile impacted in the sea. The two other missiles were successfully engaged and shot down by the USS Gravely (DDG 107). There were no reported injuries or damage to the ship,” USCM said.

The latest attack comes on the heels of US and UK-led strikes on Houthi positions in Yemen as a response for their attacks on commercial shipping in the Red Sea.

The attacks were criticized by China and Russia in the U.N. as too hasty, with fears being raised that they could result in further escalation of tensions in the region and spillover of conflict in the Middle East.

What is more, the latest rush to air strikes has further escalated tensions in an already fragile ceasefire in Yemen.

Houthi forces said initially that they would solely target Israeli-linked and Israeli-bound ships demanding humanitarian aid be delivered to Gaza and seeking a cease-fire in the Strip. Israel’s war on Gaza has killed over 25,000 Palestinians since it began on October 7.  Nevertheless, following an exchange of fire with a U.S. Navy vessel and subsequent airstrikes, the Houthi forces are now targeting U.S.-flagged vessels as well.

An increasing number of companies from all shipping sectors are redirecting their services around the Cape of Good Hope out of security concerns.

QatarEnergy, one of the world’s largest LNG producers, said yesterday that the Red Sea conflict may impact deliveries of some liquefied natural gas (LNG) cargoes as they take alternative routes, although shipments are being managed with buyers.

“Qatar’s LNG production continues uninterrupted, and our commitment to ensuring the reliable supply of LNG to our customers remains unwavering,” Reuters reports, citing a company statement.

Meanwhile, other companies, like Hapag-Lloyd are switching over to inland solutions. Namely, the German liner major said that it has introduced land service corridors from Jebel Ali, Dammam, and Jubail to Jeddah as a response to the Red Sea crisis.

“This will enable the connection with our ocean shuttle service out of Jeddah. While this is not the optimal solution in terms of capacity, it will offer another option to the current transit times, especially where alternative routings become excessively long,” the company said.

The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope account for an extra $932,905 per voyage while increasing transit time from 16 days to 32 days according to a report by LSEG Shipping Research.

These additional costs mostly account for extra fuel and increased costs for an Aframax tanker by 110%, while for a large container vessel, it increases by 35% for a voyage between Asia to NW Europe.

Transits through Suez have been hugely affected following the Red Sea attacks. Average monthly transits through the Suez from June to November 2023 equaled 1,914. This dropped to 1,672 in December, a 12.6% drop in transits, and January month-to-date transits are assessed at 947 as of 22nd Jan, which translates to a 32.6% decline.

Daily container vessel traffic within the Red Sea has dropped by almost 60% since mid-December, with the larger container ships being the most responsive to avoid the region as their transits have declined by over 80%.

“As we saw with the grounding of the Ever Given in 2021, the importance of the Suez Canal and the Red Sea to global trade cannot be understated,” Fabrice Maille, Global Head of Shipping at LSEG, said.

“The impact of this conflict is therefore considerable leading to very difficult decisions to be made regarding financial costs and security risks.”

The end to the escalating Red Sea conflict seems to be nowhere in sight forcing shipping lines into round-of-Africa routings for the foreseeable future which is resulting in higher CO2 emissions.

As explained by Alan Murphy, CEO of Sea-Intelligence, there are three elements to consider: increase in emissions due to longer sailing distances, potential increases due to faster sailings speeds (to maintain weekly departures), and if there is a shift from large vessels to smaller, less fuel-efficient vessels.

Using a proxy container service, Sea-Intelligence can estimate the scale of these increases in CO2 emissions.

“If the shipping lines use the exact same vessels, at the exact same speed, then emissions increase on a 1:1 ratio with increased sailing distances. As sailing distances around Africa are on average 31% and 66% longer for Asia to North Europe and Mediterranean, respectively, CO2 emissions will increase by these factors, at minimum,” Murphy explained.

“If the vessels also sail faster, then emissions will increase even further, as fuel consumption is not a linear function of sailing speed. As an example, based on our fuel consumption model, a 1 knot increase in speed from 16 to 17 knots, will increase emissions by 14%.”

Finally, as shipping lines scramble to phase in additional capacity to cater for the longer sailing distance, smaller, less fuel-efficient vessels are being deployed on Asia-Europe.

On a TEU basis, some of these smaller vessels see an increase in CO2 emissions of 141%, compared to conventional ULCVs. Putting all three components together could lead to CO2 emissions increases of 260% and 354%, to North Europe and the Mediterranean, respectively, Murphy emphasized.

“There is no realistic way to mitigate the increased emissions, at the very least those that are due to an increase in sailing distances,” he concluded.