Maersk pauses shipping through Red Sea

Maersk (CPH: MAERSK-B) has decided to halt all shipping through the Red Sea. Its shares are up roughly 7.0% at writing.

Maersk vessel came under militant attack

The shipping giant will pause transit through the Gulf of Aden as well until further notice, as per its announcement on Tuesday.

Maersk attributed the decision to a militant attack on one of its vessels this past weekend. According to the Danish firm:

The news arrives a couple months after Maersk said its revenue was cut nearly in half on a year-over-year basis to $12.1 billion in its fiscal third quarter of 2023.

What alternative will Maersk use?

Maersk had first announced a 48-hour pause following the Houthi militant attack on its vessel over the weekend. But now it says shipping in the region will remain suspended until further notice.

On Tuesday, the 120-year-old company based out of Copenhagen also confirmed that it will re-route vessels through the Cape of Good Hope in Africa when it makes senses.

Note that the Red Sea enables about 12% of global trade. It also transports some 3 million barrels of crude oil per day, as per the analysts at RBC Capital Markets.