A.P. Moller-Maersk (OTCPK:AMKBY) has pressed the pause button on Red Sea shipping, opting for a 48-hour hiatus to assess the current security landscape in a critical waterway that handles a staggering one-sixth of global trade.
While a U.S.-led naval task force, christened Operation Prosperity Guardian, involving 20 other nations, took shape in December to safeguard commercial vessels from Yemen’s Houthi rebels, it doesn’t seem to be effectively thwarting attacks in the Bab el-Mandeb Strait.
Over the weekend, the Maersk Hangzhou raised two distress calls in less than 24 hours. Firstly, the container ship was hit by a missile while traversing the Southern Red Sea. Subsequently, it found itself encircled by four boats originating from Yemen, their crews attempting to board it. In response, the U.S. Navy sank three of the Houthi boats, prompting the fourth to flee the area.
As per a report from The New York Times, the Biden administration is under growing pressure to take out missile and drone bases in Yemen and thereby restore American deterrence. Stay attentive to shipping stocks in the forthcoming sessions as investors evaluate freight rates and additional war risk premiums.
Related tickers: Hapag-Lloyd (OTCPK:HPGLY) OOCL (OTCPK:OROVY) Danaos (NYSE:DAC), Global Ship Lease (NYSE:GSL), ZIM (NYSE:ZIM), Matson (NYSE:MATX) and Navios Maritime Partners (NYSE:NMM).
Shipping Stocks Assessment