US-led Alliance Securing Sea Routes Gives Shippers Confidence to Resume Suez Voyage

This followed the setting up of the multi-national security initiative Operation Prosperity Guardian (OPG), led by the US.

“As of Sunday 24 December 2023, we have received confirmation that the previously announced multi-national security initiative Operation Prosperity Guardian has now been set up and deployed to allow maritime commerce to pass through the Red Sea / Gulf of Aden and once again return to using the Suez Canal as a gateway between Asia and Europe,” the shipper said in an advisory to its customers.

“This is most welcome news for the entire industry and indeed the functionality of global trade. With the OPG initiative in operation, we are preparing to allow for vessels to resume transit through the Red Sea both eastbound and westbound,” it added.

Maersk is among more than ten of the world’s biggest shippers who decided to avoid the Suez Canal which is under attack from the Yemen-based Iran-backed Houthi militants. Close to 400 ships have taken a 6,000 nautical-mile detour via the Cape of Good Hope, leading to an increase in transit time and transport costs. The Red Sea, links Europe, Africa and Asia near the Israel-Palestine conflict zone.Meanwhile some shippers continue to take the detour and levy charges.

Indian logistics and freight forwarding company Allcargo Logistics has levied a so-called contingency surcharge of $30-$40 per cubic meter of shipping space for voyages to Europe, Canada, the Mediterranean, Latin America, the Gulf and the US.These are destinations the Suez Canal connects to the East.

“There is an inevitable impact on freight necessitating the implementation of a contingency surcharge,” said an Allcargo advisory to its customers.

“The surcharge is crucial to maintaining the continuity of transportation services to our valued customers, especially for shipments being rerouted until further notice (including containers currently in transit),” it added.