Korea Selects Pan Ocean’s Parent as Buyer for HMM

HMM Algeciras was the largest capacity containership when it was built (HMM file photo)

PUBLISHED DEC 18, 2023 3:51 PM BY THE MARITIME EXECUTIVE

 

 

Korea’s state-owned financial institutions took a key step in the long-running effort to privatize HMM announcing they selected the bid from the parent company of Pan Ocean, the Harim Group, as the preferred bidder to acquire control of HMM. The final round of bidding took place in November as a head-to-head showdown between two Korean corporations.

“Korea Ocean Business Corporation and Korea Development Bank selected Pan Ocean and JKL consortium as the preferred negotiating party for the sale of HMM management rights,” they announced in a brief statement. Media reports are valuing the bid at $4.92 billion for nearly 58 percent of the outstanding stock of HMM or just under 400 million shares. That infers a total valuation for HMM of nearly $8.5 billion.

They now plan to enter into final negotiations for the detailed contract terms. The state-owned institutions reported they expect to complete the transaction in the first half of 2024.

It marks a key step in the decade-long effort by the government first to bail out the financially troubled Hyundai Merchant Marine and then complete the successful reorganization of the company as HMM. KDB first invested in the container shipping company in 2013 as it was lapsing into bankruptcy and three years later took control of the company in a debt-for-equity swap which also saw the establishment of the Korea Ocean Business Corporation to lead the restoration of the company. 

Business units were sold including the LNG shipping company while KOBC helped to finance the construction of 20 new vessels to modernize the container operations. HMM emerged as one of the most efficient carriers including being a pioneer in the ultra large container vessel category with for a time the largest capacity boxship in the world. The efforts paid off with HMM returning to profitability after eight years in 2020 and recording large profits during the surge in container shipping between 2020 and 2022.

The Korean government wanted to keep ownership and control of HMM in Korea and the Harim Group, a food processor and the country’s largest poultry company, promised to make Korea a powerhouse in shipping. Harim partnered with a private equity firm, JKL, which will help to finance the transaction. JKL was also a partner in Harim’s 2015 acquisition of Pan Ocean.

Reports in the Korean media are that the selection committee was impressed by the management of Pan Ocean, which is one of the leaders in dry bulk shipping. About 70 percent of Pan Ocean’s operations are bulkers, but the company also has a small interest in containers, tankers, and LNG/heavy lift. They are reported to own over 100 bulkers and manage a total fleet of 300 ships. It is unclear from the reports if the plan includes merging HMM and Pan Ocean.

Media reports have raised some questions about potential regulatory concerns as the bid will need to be reviewed by the antitrust regulators. Harim will also have to leverage its finances to pay the hefty purchase price. The company has said it would sell stock and bonds and possibly some vessels.

One of the sticking points that the media reports said held up the deal is the strategy for the state’s remaining share in HMM. The bid reportedly initially contained a stipulation that KDB and KOBC would not convert their remaining bonds for at least three years. The government institutions had indicated at the beginning of the bidding process that they would work with the buyer to develop a plan for the sale of the remaining perpetual bonds. When those bonds are converted into shares, they will dilute the buyer’s position from 58 percent to just under 39 percent. Harim is reported to have withdrawn the stipulation clearing the way for it to win the bidding after scoring highly with the committee on its management and financial plan.

HMM recently highlighted that the company was moving forward with its diversification strategy as well as continuing to build its containership position. In 2023, the company ordered nine methanol-fueled 9,000 TEU containerships and three pure car and truck carriers (PCTCs). HMM also ordered four multipurpose vessels (MPVs) and recently entered into a long-term charter-out contract for four bulkers. Early in December, it was revealed that they would build at least six of the world’s largest car carriers that will be operated on a long-term charter with Hyundai Glovis.

Harim is expected to begin additional due diligence on HMM in the near year. There have been some reports in the media that the losing bidder Dongwong Group might protest the deal, but the state-owned institutions are expected to proceed with negotiations to complete the sale contract.

 

African Development Bank to Create African Ports Index

Luderitz, Namibia (iStock)

PUBLISHED DEC 17, 2023 11:53 AM BY THE MARITIME EXECUTIVE

 

The Beijing-based infrastructure fund Multilateral Cooperation Center for Development Finance (MCDF) has approved a $2 million grant aimed at sealing data gaps in Africa’s port operations. The initiative will be implemented by the African Development Bank (AfDB), and will produce a port data book that provides performance data and practical information for Africa’s ports.

According to MCDF, addressing Africa’s data gaps in port operations is key in facilitating investment in port expansion, and would also help to boost port performance.

In addition, the project will create a web-based portal for securely collecting, storing and retrieving African port data. This will help the Regional Ports Management Association, AfDB, individual port authorities and development partners assess port service and performance.

An African ports index with benchmarking sub-indices that cover key thematic areas in port operations and development will also be produced. The index will contain data on port performance, efficiency, legal and regulatory frameworks, cargo type and throughput among others.

“The African Development Bank has identified the African Ports Connectivity Portal as a key driver to unlock Africa’s ports and maritime development needs into investment opportunities by 2030,” said Marco Yamaguchi, Transport and Logistics Manager at AfDB.

In the past decade, the use of maritime business intelligence tools such as shipping indices have become commonplace. These advanced analytics have been vital for enabling decision-making on investment, risk management and business optimization in the maritime industry. 

 

Carbon Ridge, Crowley to Launch Advanced, Onboard Carbon Capture Project

PUBLISHED DEC 17, 2023 8:20 PM BY THE MARITIME EXECUTIVE

 

[By: Crowley]

Crowley and Carbon Ridge Inc, a leading developer of modular onboard carbon capture and storage solutions (OCCS), with support from the U.S. Maritime Administration (MARAD) Maritime Environmental and Technical Assistance (META) program, have initiated an advanced, pilot project to reduce emissions impacts using Crowley’s Storm international container ship.

Using Carbon Ridge’s patent-pending, second generation carbon capture technology, the companies and MARAD have executed a cooperative agreement for the pilot program to operate, measure and optimize the technology’s effectiveness in actual maritime environments at port and ultimately at sea. The collaboration includes the engineering, manufacturing and integration of a small capacity version of Carbon Ridge’s full-scale carbon capture system. 

“The advancement of the pilot project represents a milestone in the emerging technology for carbon capture. With its potential for significant emissions reductions through retrofitting or during new building, ship owners and operators have the opportunity to future-proof their vessels for incoming regulations, as well as reach internal goals for decarbonization and reduced emissions impacts,” said Chase Dwyer, CEO, Carbon Ridge. 

Crowley’s engineering services group, which provides vessel design and engineering, project management and waterfront engineering by leveraging its research and development team for internal and external customers, is leading the integration of the pilot system on the Storm, which serves the U.S. and Caribbean Basin. The carbon capture system will be housed in two 40-foot container units on the vessel’s main deck and have an additional 20-foot ISO-certified tank for storing the captured liquid CO2. The pilot project is expected to capture 1 metric ton per day from the vessel’s main engine. 

“We are excited to help spearhead the maritime industry’s journey to cleaner operations at sea and in our communities,” said Brett Bennett, senior vice president and general manager, Crowley Logistics. “This is a strong step forward to understanding and achieving our commitment to reaching net-zero emissions as part of our sustainability strategy.”

“MARAD is pleased to work with industry partners through META to demonstrate innovative technology applications that may lead to greater greenhouse gas emission reductions in the maritime sector,” said Daniel Yuska, director of the MARAD Office of Environment and Innovation. 

Installation of the pilot unit on the vessel is expected in 2024 after completing onshore testing.

In 2022, Crowley contributed to Carbon Ridge’s seed funding round to continue developing the technology. 

 

NTSB: Corrosion Caused Heavy-Lift Hoist Failure

Courtesy NTSB

PUBLISHED DEC 18, 2023 4:03 PM BY THE MARITIME EXECUTIVE

 

Undetected corrosion and wear caused a wire rope to fail during the hoisting of a wind turbine component aboard the heavy lift ship Thorco Basilisk last year, resulting in $3-5 million of damages, according to the National Transportation Safety Board (NTSB).

On July 23, 2022, a wire rope on a shipboard crane parted while the ship was offloading a 68-tonne wind turbine nacelle at the Greensport Terminal on the Houston Ship Channel. The failure caused the component to drop onto the vessel’s cargo hold tween deck, and the crane block punched through the top of the nacelle's housing. Although no pollution or injuries were reported, damages to the ship and the nacelle were estimated at $3-5 million.

Investigators found that the 1.5 inch wire rope had obvious signs of external corrosion and wear. Sections from either side of the location where the rope had parted exhibited “a significant level of external corrosion” with a severity rating of about 60 percent. However, the visible signs of external corrosion could not be fully seen until the grease on the rope was removed. The crew followed the common maritime industry practice of leaving the old grease on their wire ropes during relubrication maintenance ("slushing"), since removing the old dried-out lubricant would be impractical without specialized equipment. 

While the hoisting wire rope was still within the standard 10-year service lifetime, NTSB determined that “the wire rope was near the end of its service life and probably should have been discarded.”

“Saltwater and humid ocean air cause corrosion of metals, presenting challenges for the maintenance of high-strength steel wire ropes on vessels. A deteriorated wire rope directly affects a crane’s ability to safely and reliably handle loads up to its rated capacity,” NTSB said.

Following the NTSB recommendations, vessel operator Auerbach Marine updated its maintenance schedule to require crane wire rope replacement every five years.

 

Port of New Orleans Gets $74M Grant for New Container Terminal

Rendering of the planned terminal in St. Bernard Parish (Port of New Orleans)

PUBLISHED DEC 18, 2023 11:59 PM BY THE MARITIME EXECUTIVE

 

The Port of New Orleans has secured a $74 million grant for planning the development of a controversial new container terminal in St. Bernard Parish. The funding comes from the 2021 Infrastructure Act, a $1.2 trillion funding package for improving America's ports, waterways, railways and roads. 

The grant for Port of New Orleans will help facilitate a $1.8 billion terminal project, which is intended to help the seaport compete with Houston and Mobile in the containerized freight market. The physical limitations of the current terminal - both in depth and overhead clearance - restrict its ability to handle today's bigger ships, and New Orleans has gradually lost market share to its neighbors over the past decade. 

“This is a great day for the Port of New Orleans and our state," Sen. Bill Cassidy (R-LA) said, noting that he helped secure Louisiana's share of the bill. "The funding will not only benefit the port but also create numerous jobs and boost our communities."

New Orleans has been planning a new terminal in St. Bernard Parish since 2018. The 1,100-acre site is located about 7.5 miles to the southeast of New Orleans proper, in the small town of Violet. 

Community activists and some local officials in St. Bernard Parish are opposed to the terminal's construction, citing its impact on the environment and the local way of life. The facility would be a dominant presence in the small riverside town, and would bring an abundance of truck drayage headed to and from the waterfront. The port plans to add road infrastructure to reduce the impact on local traffic. 

In August, the parish's district attorney sued the Port of New Orleans in an attempt to halt the project. The port's director dismissed the suit as "election year theatrics," and the plan remains to move ahead with final design work and permit applications. All going well, the project should break ground in 2025. 

"For decades, it has been clear that a new container terminal is needed downriver from the Crescent City Connection Bridge in order to secure the future of the state’s trade-based economy," port CEO Brandy Christian told Nola.com.

MONOPOLY CAPITALI$M

Cadeler Completes Eneti Acquisition to Make Large Wind Installation Company

Cadeler will have a fleet of 10 dedicated wind installation vessels by 2026 (Cadeler file photo)

PUBLISHED DEC 18, 2023 5:17 PM BY THE MARITIME EXECUTIVE

 

 

Shareholders accepted the proposed merger between Cadeler and Eneti which will create the largest owner-operator of wind turbine installation vessels. Settlement of the share exchange is expected to begin momentarily as regulators have accepted the registration of the new shares. Cadeler reported late today that it expects to receive final approval tomorrow, and the new shares are expected to begin trading on December 20.

Cadeler released the final results of the tender offer which closed on December 14. More than 33 million shares were tendered before the closing representing more than 86 percent of the outstanding shares of Eneti. The companies had lowered the minimum acceptance requirement to 70 percent, but they not only met that but also the original requirement which had been set at 85 percent. 

Having reached these levels, Cadeler reports it can also proceed with the plan to complete the acquisition by effecting a squeeze-out merger. That will remove any remaining shareholders and make Eneti a wholly-owned subsidiary of Cadeler.

Commenting on the strong support from shareholders, the CEO of the Cadeler Mikkel Gleerup said they would be able to pursue the company’s vision and enhance the capability to facilitate the renewable energy transition that is already underway. He points to their long track record while saying the combined company will have “one of the industry’s largest, most flexible, most diverse, and modern fleets of wind farm installation vessels. Cadeler will be able to handle the largest and most complex next-generation offshore wind installation projects currently seen in the market.”

The combined company will continue under the Cadeler identity with its headquarters in Copenhagen, Denmark. They point to the global presence and scale of the company while saying that they expect to realize €106 million in annual synergies.

The group will operate four existing vessels, including Cadeler’s two high-end Windfarm Installation Vessels (WIVs), Wind Orca and Wind Osprey. Eneti as part of the terms of the deal was moving to sell three of the five vessels acquired in the acquisition of Seajacks.

Cadeler and Eneti were separately pursuing new builds with Cadeler scheduled to receive two WTIVs in Q3/2024 and Q2/2025, and two wind foundation installation vessels scheduled for delivery in Q4/2025 and Q3/2026. Eneti also has two WTIVs scheduled for delivery in Q4/2024 and Q2/2025.

Ten days ago, they announced the completion of a new €550 million green load facility to refinance the existing vessels owned by Cadeler and Eneti ahead of the business combination. It will also be used to finance crane upgrades of Cadeler’s two existing vessels and to fund general corporate and working capital purposes.

Completing the business combination, they expect with the delivery of the six newbuilds scheduled from 2024 to 2026 to have a total of 10 vessels all dedicated to wind farm installation.

 

Fruit Juice Tanker Becomes Latest Vessel to Add Wind-Assisted Propulsion

Rendering of Atlantic Orchard after the suction sails are fitted (Wisby Tankers)

PUBLISHED DEC 19, 2023 3:36 PM BY THE MARITIME EXECUTIVE

 

 

The adoption of wind-assisted propulsion is continuing to grow as more shippers and vessel owners seek to increase the efficiency and lower emissions from their ships. The latest plan will see the adoption of suction sails aboard a decade-old fruit juice carrier.

Bound4Blue, a Spanish-based company developing automated wind-assisted propulsion systems, reports it received a contract to develop and install four of its eSail technology aboard the Atlantic Orchard (34,500 dwt). The vessel, which was built in 2014 and is registered in Liberia, is a fruit juice carrier currently sailing between Brazil and Belgium for the Netherlands-based agricultural company Louis Dreyfus Group.

Owned by Wisby Tankers of Sweden, the 590-foot (180-meter) vessel will be fitted with four suction sails. Each will stand approximately 85 feet (26 meters). The installation for the Atlantic Orchard is scheduled for 2024. The companies said that the installation of the eSails, depending on vessel routing, is expected to reduce annual fuel consumption and CO2 emissions by at least 10 percent.

The company began working on developing this technology nearly a decade ago. Bound4blue reports it currently holds the record for the largest suction sail ever constructed and installed on a ship. It uses a thick aerodynamic profile and intelligent suction mechanisms to produce the propulsive energy for the vessel. The company completed its first installation in 2021 and has proceeded with several additional projects. They report the suction sail yields seven times more lift than an airplane wing.

The decision to implement this technology on the Atlantic Orchard the companies report was based on a third-party assessment study carried out by Lloyd’s Register. The project evaluated a range of solutions and identified Bound4blue’s suction sails as the most promising. The suction sail is a competing technology in the wind-assisted propulsion sector which also includes rigid sails, rotors, and a kite-like concept, all of which capture wind energy to provide propulsive force which reduces the power required from a vessel’s engines. 

This project is co-funded by the European Innovation Council (EIC) Acceleration Program. In September, Bound4blue also reported that it had received a total of €6.5 million from grants in 2021 and 2022 from the Innovation Fund Program, awarded by CINEA (European Climate, Infrastructure, and Environment Executive Agency) as part of a total €22.4 million raised in a new round of funding. They reported that the new funding would contribute to further development of the eSail technology and its commercialization, as well as expanding the company’s productive capacities and personnel.

 

BAE's Sub Workforce Problems May Foreshadow Difficulties for AUKUS

Image courtesy BAE

PUBLISHED DEC 17, 2023 1:19 PM BY THE STRATEGIST

 

[By Samuel Garrett]

Senior officials in Australia, the United States and the United Kingdom continue to sing the praises of the AUKUS agreement. The likely passage of the US National Defense Authorization Act and approval of billions of dollars in US support, along with announcements on joint development and progress on Pillar 2 initiatives, have raised hopes among the deal’s proponents that Pillar 1—the AUKUS-class nuclear-powered submarines—will deliver the capability it promises.

Yet if the Australian government wishes to deliver Pillar 1 on time and within the already-wide budget range it has previously outlined, it must learn lessons from the troubled history of the UK’s Astute class of nuclear-powered attack submarines (SSNs). BAE Systems, the primary contractor for the Astute program, was awarded a contract to develop the AUKUS submarines in October and is likely to face challenges in developing a nuclear-capable workforce in Australia, as it did in the past in the UK.

With the AUKUS boats slated to be modelled off the Astute design and Australia having to build a workforce from a low industrial base like the UK had, Australia is at risk of repeating the mistakes of the past unless concerted efforts are made to mitigate the problems that hampered the rollout of the Astute program.

As outlined in a new report from the United States Studies Centre, the Astute program was plagued by delays and cost overruns from its inception—primarily because of poor integration and mismanagement of the shipbuilding workforce. A 17-year ’valley of death’ in submarine development at Barrow-in-Furness resulted in significant attrition of its experienced workforce, with little investment in a new generation of young talent to replace retiring workers.

The Barrow shipbuilding workforce fell from 13,000 to 3,000 between the end of the Vanguard class and the beginning of the Astute program. It therefore had significant skills shortages due to its reliance on new staff hired at the outset of the Astute program.

In addition, a small-government philosophy among the leadership of the day slashed the Ministry of Defence’s staff at Barrow from 50 during Vanguard to fewer than half a dozen. Minimal governmental oversight and coordination exacerbated the Astute program’s problems and led to poor visibility within government of the challenges facing the shipbuilding workforce. The private sector then proved ill-prepared to deal with erroneous government assumptions about the design and construction risks of the program.

Following years of delays and cost increases, the workforce issues hampering the Astute rollout began to be mitigated by greater government oversight, stakeholder communication and thorough planning of future workforce requirements. The workforce at the Barrow shipyard now numbers around 10,000 and is poised to grow to 17,000 by the decade’s end. Increases to onsite Ministry of Defence staff, the establishment of a key suppliers forum to coordinate with industry, and external workforce expertise from the US significantly boosted workforce skills, planning and management.

Key to ongoing workforce resilience has been the establishment of a £25 million skills academy in Barrow in 2018. A focus on young workers has boosted retention rates, with hundreds of apprentices having now passed through the academy. Effective integration of funded apprenticeships is likely to also be needed for the development of Pillar 1.

If Australia is to avoid the same pitfalls faced by the UK in developing a nuclear-capable workforce, it must prioritise workforce management and development as crucial to the AUKUS enterprise. Announcements of initiatives such as a skills academy in South Australia and support for university science, technology and engineering places and overseas shipbuilding placements for Australian workers are signs that the government is taking these concerns seriously.

Yet for a multi-decade program such as AUKUS, relentless attention on workforce management will be essential. Strong government leadership will be required to coordinate private-sector efforts, along with effective project and workforce management. Given the significant lead time required to recruit, train and develop a specialised industrial workforce and the enormous complexity of the engineering task they face, efforts will have to be rapidly expanded in the short term but continued in the long term.

The Australian Submarine Agency should also take care not to fully separate the design, build and operational planning teams. That was the approach taken during the Astute program, which hampered its early development due to unwieldy workforce and project management.

Mimicking the model of vocational skills training successfully employed in the UK won’t be easy. British training institutions have benefited from close relationships with employers such as BAE, but structural hurdles in Australia’s tertiary education system and limited integration between industry and tertiary education will make that hard to replicate.

In the absence of proper planning and workforce development, the strategic argument for AUKUS is likely to unravel in the face of mounting costs and delays. The risks and challenges of the Astute program were underestimated by both industry and the UK government. If Australia wishes to see AUKUS through, it can’t afford to make the same mistakes.

Samuel Garrett is a research associate at the United States Studies Centre at the University of Sydney.

This article appears courtesy of ASPI's The Strategist and may be found in its original form here. 

 

Maersk Diverts 20 Ships From Red Sea as Other Carries Invoke Force Majeure

Maersk is diverting approximately 20 ships away from the Red Sea and Suez Canal due to continuing safety concerns (SCA file photo)

PUBLISHED DEC 19, 2023 12:27 PM BY THE MARITIME EXECUTIVE

 

 

Maersk confirmed after pausing all of its containerships near the Red Sea it has determined to reroute approximately 20 vessels due to what it calls the “alarming” attacks and the “significant threat to the safety and security of seafarers.” The world’s second-largest container shipping company follows a growing list of shipping companies including container carriers, oil tankers, LNG and LPG carriers, and car transports all reporting that they have begun to reroute vessels despite the U.S. announcement yesterday of a coalition task force.

The situation in the area around Yemen and the Red Sea appears relatively stable today after a series of attacks over the past few days. UK Trade Organizations received reports of one or two possible approaches by small boats today, December 19, but the crews did not see weapons and stated that the small boats withdrew. There are no reports of drone or missile attacks.

A spokesman for UK Prime Minister Rishi Sunak confirmed to Reuters that the UK is part of the task force and France announced its participation, but the UK said other than HMS Diamond it does not plan at this time to send additional vessels to the region. They highlighted that the U.S. has three warships now in the area while telling Reuters that the task force would have considerable capacity to deter future attacks and protect commercial shipping.

“We are pleased to see global governments reacting promptly,” Maersk said in its statement indicating that it is hopeful to stop the rerouting “in the near future,” but saying the timing for a resumption of service through the Red Sea “remains difficult to determine.”

Maersk reports that it had nearly 20 ships holding north and south of the Suez Canal and east of the Gulf of Aden. All will now be rerouted around Africa via the Cape of Good Hope. The company reiterated that it remains “deeply concerned about the situation,” and will consider its next steps. They are planning a case-by-case assessment for future sailings, which could include diversions via the Cape of Good Hope or further contingency measures.

Asian carriers were also among the companies announcing overnight that they were altering their sailing plans. HMM, Evergreen, Wan Hai, and Yang Ming all reported plans to suspend sailing through the Red Sea. They followed the lead of the world’s largest container carriers, including MSC, Hapag-Lloyd, and CMA CGM which all reported similar actions. Both Hapag and CMA CGM cited clauses in their Bill of Lading / Sea Waybill Terms and Conditions and invoked Force Majeure to divert their ships. Hapag is listing as of December 19 a total of 54 sailings stretching into 2024 that will divert around the Cape of Good Hope while reporting it still has five vessels "drifting" at points nears the Red Sea and Suez Canal. 

Analysts highlight that all the planned diversions will require additional capacity for the carriers to maintain service. Lars Jensen, chief executive of Vespucci Maritime, estimated for Lloyd’s List that the diversions would require up to 1.7 million TEU and involve five to six percent of the sector’s capacity helping to reduce the current overcapacity for containerships. 

Norway-based vehicle transport company Wallenius Wilhelmsen also cited the “deteriorating security situation,” reporting that it will reroute all vessels planned for Red Sea transits. They said several vessels have been successfully diverted warning shippers that it will add between one and two weeks to the duration of the voyage.

MSC and CMA CGM Suspend Red Sea Transits, Joining Hapag and Maersk

MSC reports its ships are stopping Suez Canal transits and some have already been rerouted around South Africa (SCA file photo)

PUBLISHED DEC 17, 2023 2:14 PM BY THE MARITIME EXECUTIVE

 

 

The security situation in the Red Sea is continuing to decline, prompting MSC and CMA CGM to announce that they have suspended all sailings in the region. The announcement follows similar alerts from Maersk and Hapag-Lloyd on Friday. The actions by the world’s largest container shipping companies come as the naval forces of the U.S. and UK, as well as other allies including Egypt, have all reportedly taken down drones launched from the Houthi-controlled regions of Yemen.

Saying that “The situation is further deteriorating and concern of safety is increasing,” CMA issued a statement today, December 16 reporting it is implementing preventive measures for navigation in the Red Sea. 

“We have decided to instruct all CMA CGM containerships in the area that are scheduled to pass through the Red Sea to reach safe areas and pause their journey in safe waters with immediate effect until further notice,” CMA CGM reports. The French carrier has not said what it will do with the cargo, but it follows a similar decision by Maersk which paused Red Sea sailings a day after one of its ships was attacked. Hapag-Lloyd also said yesterday it was pausing all container ship traffic through the Red Sea until Monday, reporting “Then we will decide for the period thereafter.”

On Friday, one of Hapag-Lloyd’s large containerships was ordered to sail toward Yemen. When it ignored the command, it was struck by a missile that caused some damage and a small fire. The crew was able to extinguish the fire and the vessel continued its trip leaving the danger zone.

MSC in its statement is now also confirming that its vessel the MSC Palatium III was attacked and suffered limited fire damage on Friday. The USS Mason reported going to the assistance of the containership but said the vessel later advised it did not require additional assistance. MSC reported today that the vessel is being taken out of service. A recent AIS signal shows the ship traveled west in the Gulf of Aden and is now stopped in Djibouti.

“Due to this incident and to protect the lives and safety of our seafarers, until the Red Sea passage is safe, MSC ships will not transit the Suez Canal Eastbound and Westbound,” the company wrote in a Customer Advisory. “Already now, some services will be rerouted to go via the Cape of Good Hope instead.”

The decision to suspend sailings through the Red Sea comes as the security situation in the area continues to deteriorate. Security consultants and the international alliance in the region are all confirming an escalation in the attacks coming from Houthi militants. 

Royal Navy Destroyer Joins Red Sea Maritime Security Force

HMS Diamond launches a Sea Viper missile to shoot down a Houthi drone (Royal Navy)

PUBLISHED DEC 19, 2023 3:06 PM BY ROYAL NAVY NEWS

 

HMS Diamond has joined an international naval force on a dedicated mission to safeguard shipping in the Red Sea.

Just three days after the Portsmouth-based destroyer downed a drone fired at merchant shipping, Diamond has been assigned to the new Operation Prosperity Guardian, an international effort involving the USA, UK, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain.

Led by Combined Maritime Forces’ Combined Task Force 153 – which is responsible for security in the Red Sea, Bab al-Mandeb narrows and Gulf of Aden – the operation has been established to ensure the free-flow of shipping through one of the world’s most important sea lanes.

That shipping has come under attack repeatedly in recent weeks with drones fired by Houthi rebels in Yemen – with US, French and British warships all called upon to take out the threats with air defense missiles.

Diamond’s actions in the small hours of Saturday morning is the first time a Type 45’s Sea Viper missile has been used in action and the first such shootdown by the Royal Navy since the 1990-91 Gulf War.

Ships from multiple nations will conduct maritime patrols in the region and respond as appropriate to threats to shipping.

The warships’ presence is also intended to reassure the maritime shipping industry, deter illegal activity, and promote safe navigation while protecting the free flow of international commerce on the high seas.

“The hostile actions of the Houthis, with their attacks on merchant vessels in the southern Red Sea, are a clear threat to the global economy and challenge the security, stability, and prosperity of all,” said United Kingdom Maritime Component Commander Commodore Phil Dennis, the senior Royal Navy officer in the Middle East. “Freedom of navigation and the unimpeded flow of goods and trade have long been central tenets of the Royal Navy."

An estimated 23,000 merchant vessels pass through the Bab-al-Mandeb choke point – with Suez the gateway to the Middle East and beyond for shipping from Europe. 

Vice Admiral Brad Cooper, the US officer commanding the Combined Maritime Forces from their headquarters in Bahrain, underlined that safe passage of the Red Sea was “crucial for the world economy”.

He continued: “More than 10 percent of global trade transits the waters anchored by two globally strategic waterways – the Suez Canal and the Strait of Bab-al-Mandeb. Regionally, it has even greater impact, channeling trade across more than half the globe, ranging from Europe to Asia. An attack on a single ship may easily impact as many as ten or more nations.”

U.S. Weighs Military Options After Massive Houthi Drone Attack

The destroyer USS Carney downed a total of 14 drones Saturday morning

USS Carney launches a surface-to-air missile at a drone threat (file image courtesy USN)

PUBLISHED DEC 17, 2023 10:19 PM BY THE MARITIME EXECUTIVE

 

The White House is weighing options for striking back at Yemen's Houthi rebels after a month of attacks on commercial shipping in the Red Sea, officials have told Politico.

Military options have been presented to the White House, according to Politico; however, the Biden administration has so far been reluctant to move beyond shooting down incoming drones and missiles. American officials (and their counterparts in allied nations) are said to be concerned about the risk of sparking a broader conflict with Iran, the state sponsor of the Houthi movement. Iran also has military proxies in Iraq, Syria and Lebanon, and has the ability to interdict shipping in the Strait of Hormuz. 

The U.S. Navy has positioned the carrier USS Dwight D. Eisenhower in the Gulf of Aden, and three extra destroyers - USS  Laboon, Delbert D. Black and The Sullivans - have entered the Mediterranean. The carrier USS Gerald R. Ford has had her deployment extended a third time to ensure continued coverage off Israel. 

Houthi forces have been interfering with shipping since November 20, when they hijacked the car carrier Galaxy Leader in protest of Israeli operations in Gaza. The boarding and subsequent drone attacks did not sway the administration, nor the shipping industry, which continued to use the Suez Canal and Red Sea almost without change (according to the Suez authorities).

But the math has changed over the past few days. Four shipping lines have announced that they will skip the Red Sea and take the long voyage around Africa instead, adding about 1,900 nautical miles to a typical Asia-Northern Europe voyage. The military situation has also changed. U.S. CENTCOM reported on Saturday that the destroyer USS Carney had downed a total of 14 drones that morning. The command wrote in a social media message that “the UAS were assessed to be one-way attack drones and were shot down with no damage to ships in the area.” Previously the confirmed shootdowns were limited to single drones or a handful at a time, aimed at specific ships.

In addition to the U.S., France reported one of its vessels had shot down drones earlier in the week. On Saturday, UK Defence Secretary Grant Shapps reported overnight the HMS Diamond had also taken down a suspected attack drone that was targeting merchant shipping in the Red Sea. HMS Diamond was just redeployed to the region and reached the Red Sea in recent days after being ordered to make a fast turnaround and depart the UK.

The U.S. Department of Defense is also reporting that Defense Secretary Lloyd Austin will be visiting U.S. Naval Forces Central Command, where he will discuss multilateral coalitions to counter the Houthi threat. "We will talk with them in a multinational framework about the work we're doing, particularly in light of increasing Houthi aggression in the Red Sea," the official said. 

The U.S. already leads a multilateral coalition to ensure maritime security in the Middle East, the Combined Maritime Forces. However, many of its regional members have been slow to engage with this particular mission, even after multiple attacks.