A container ship from China-owned Cosco Shipping on Aug. 7, 2023.
Justin Sullivan | Getty Images News | Getty Images
Chinese state-owned shipping giant Cosco suspended shipping to Israel through the Red Sea as tensions in the strategic shipping lane continue to rise, Israeli state media reported.
The specifics of Cosco’s decision remain undisclosed, according to Israeli financial news outlet Globes.
Attacks on ships traversing the Red Sea by Iran-backed Houthi militants have pushed ocean freight rates higher and led to longer shipping journeys as shippers reroute to travel the long way around South Africa’s Cape of Good Hope instead.
Hong Kong-listed shares of Cosco were down 3% on Monday.
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To avoid strikes by the Yemen-based militants, carriers have already diverted more than $200 billion in trade over the past several weeks, with major shipping companies such as Maersk and Hapag-Lloyd pausing shipping through the Red Sea until further notice.
Cosco is China’s largest shipping firm and holds almost 11% of the trade market share.
Orient Overseas Container Line (OOCL), which is a part of Cosco Shipping Group, has also suspended sailing to the Red Sea and stopped accepting Israel-bound cargo since December, citing operational issues.
“COSCO’s decision is significant because it cooperates with Israeli shipping line ZIM, which will have to operate more ships on the Far East routes,” Globes reported.
Cosco has another line it jointly operates with Zim. In an e-mail to CNBC, Zim confirmed that it will continue its operations.
“We can confirm that our Tyrrhenian Container Line Service, connecting Israel, Fos Sur-Mer (France), Genoa and Salerno (Italy) which has been operated jointly with COSCO, will continue its operation by ZIM, and is currently planned to maintain a weekly service,” the team said, adding that the updated schedule will be published in the coming days.
Cosco did not immediately respond to a CNBC request for comment.