Maersk Red Sea pause shows Operation Prosperity Guardian limits

The threat to global trade in the Red Sea remains high, even with efforts to protect commercial vessels from attacks by Iranian-backed Houthi militants based in Yemen.

Danish shipping giant Maersk‘s decision on Tuesday to pause Red Sea and Gulf of Aden transits until further notice underscores the difficulty for the U.S.-led initiative, called Operation Prosperity Guardian. U.S. Navy helicopters, returning fire, sank three of the four Houthi boats that attacked the Maersk Hanzghou over the weekend, the U.S. military said.

Due to the threat, more commercial ships are moving away from the Red Sea and instead going around the Cape of Good Hope on the southern tip of Africa, analytics provider MarineTraffic told CNBC. That’s triggered an increase in container rates from Shanghai.

So far, the situation has affected $225 billion in trade, according to calculations. Overall, freight carrier Kuehne+Nagel said, it’s impacted 330 vessels. The total capacity is estimated at 4.5 million containers, or 20-foot equivalent units (TEUs). The value of a container bound for the Suez is $50,000, according to freight consultancy MDS Transmodal. 

Global trade data provider Kpler said the number of ships doing that jumped to 124 this week from 55 last week, and from 18 a month ago. To be sure, though, there’s been a modest increase in container ships in the Red Sea, with 21 on Tuesday, up from 16 on Dec. 26.

“Simultaneously, our analysis of traffic through the Bab al-Mandeb Strait for all vessels combined reveals a consistent downward trend in crossings for both northbound and southbound vessels,” said Jean-Charles Gordon, ship tracking director at Kpler. (The strait connects the Red Sea to the Gulf of Aden, which opens into the Arabian Sea in the Indian Ocean.)

That raises the stakes for…