Maersk’s CEO Vincent Clerc announced that the U.S. Navy informed the company that it is currently unable to guarantee the safety of all ships navigating the Red Sea.
With the company reporting an 87% decline in profits during the last quarter of 2023 compared to the same period the previous year, Clerc stated, “The situation in the Middle East and the Red Sea is escalating towards a state of uncertainty.”
Maersk’s shares fell by about 13% during Thursday’s trading, after the company announced lower-than-expected earnings in the fourth quarter and predicted significantly lower profits for 2024 amidst an oversupply of container ships.
The company stated, “There remains a great deal of uncertainty about the duration and level of disruption in the Red Sea, with the guidance range reflecting a duration ranging from a quarter of a year to a full year.”
Maersk and other shipping companies have decided to reroute their ships away from the Red Sea, opting for the longer and more costly route around the southern tip of Africa, amid Houthi targeting of ships headed to Israel.
The Houthi movement, which governs northern Yemen and controls most of Yemen’s Red Sea coast, has previously warned of its intention to attack any Israel-linked ships. It has called on other countries to withdraw their crews from these ships and to avoid approaching them at sea, leading several global shipping companies to suspend Red Sea transit operations.
The Houthis have repeatedly stated that their actions in the Red Sea are intended to support the Palestinians in the Gaza Strip and have said that they do not interfere with the freedom of navigation in the area.
Since mid-January, the United States and Britain have been launching strikes on Houthi targets in Yemen, describing them as “responses to threats to freedom of navigation in the Red Sea.”
