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Hapag-Lloyd Says Red Sea Route Still 'Too Dangerous'

Hapag-Lloyd, one of the world's largest shipping firms, has decided against resuming its use of the Suez Canal, citing ongoing security concerns despite international military operations in the region. The company ranked fifth globally in shipping capacity, deems the passage through the Red Sea, a crucial trade route, as "too dangerous" due to attacks by Houthi rebels targeting vessels en route to Israel.

While Danish shipping firm Maersk has announced its intention to resume Red Sea operations, Hapag-Lloyd stands firm in rerouting its ships via the longer Cape of Good Hope route. The decision follows recent attacks on ships in the area, prompting several companies to halt the use of this strategic trade route.

Hapag-Lloyd's spokesperson stated that the company would review its decision on Friday. The Red Sea route, connecting Europe and Africa, is vital for transporting consumer goods, oil, and liquefied natural gas. The alternative route around the Cape of Good Hope adds approximately 3,500 nautical miles to the journey, raising concerns about disruptions to the supply chain and increased transportation costs.

The Mediterranean Shipping Company (MSC) reported an attack on one of its container ships in the southern Red Sea, emphasizing the challenges faced by vessels navigating the region. In response to such incidents, a coalition named Prosperity Guardian, led by the United States, includes over a dozen countries aiming to safeguard commercial shipping in the area.

The recent disruption has led companies like IKEA and BP to anticipate delays and temporary halts in product shipments. Furniture giant IKEA expressed concerns about potential delays, while BP announced a temporary pause in crude shipments through the Red Sea.

Maersk, despite implementing security measures, acknowledges that the overall risk in the area is not eliminated. The company remains vigilant and is prepared to reevaluate the situation to ensure the safety of its seafarers.

According to Egyptian analyst, Mohamed Ata from the Universal Stock Company, any disruptions in the operation of the Suez Canal are expected to impact Egypt's foreign currency earnings, as the canal is a primary source of foreign currency for the country.

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