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Red Sea attack doubles wages for Danish crew

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(Bloomberg) — Denmark’s shipping industry, home to some of the world’s biggest companies, has agreed to double wages for seafarers sailing the Red Sea to compensate for the risks posed by recent attacks.

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According to an agreement presented on Friday by employer group Danish Shipping and the country’s three largest seafarers’ unions, hazard pay will be applied to time spent in two defined high-risk areas in the region.

Many shipping companies are avoiding the Red Sea, where the Yemen-based Houthis are attacking ships supporting Hamas in its conflict with Israel. But ships with no direct ties to Israel are also being targeted, and a U.S.-led task force is stepping up security in the vital waterway as the escalating war threatens global trade.

Denmark’s AP Moller-Maersk A/S, the world’s second-largest container line, is one of the companies preparing to resume shipping through the Red Sea after initially sailing long distances south of Africa. It is one. Some companies are taking a more cautious approach. Shipping giant Hapag-Lloyd confirmed on Friday it would continue to avoid the Red Sea and would reconsider its decision on January 2.

Data this week revealed that half of the container fleets that regularly transit the Red Sea and Suez Canal are avoiding the route. Bypassing Africa can take up to 25% longer than taking the Suez Canal shortcut between Asia and Europe, increasing costs that can ultimately be passed on to consumers. And it comes just as another major trade shortcut, the Panama Canal, is suffering from drought, increasing potential economic risks.

Read: Pentagon seeks reassurance about Red Sea shipments as doubts persist

Denmark’s government announced Friday that the Nordic country will send a warship to the Red Sea to join the U.S.-led mission. The Copenhagen-based Defense Ministry said the frigate-class ship is scheduled to arrive in the area at the end of next month.

–With assistance from Wilfried Eckl-Dorna.

(Updated to add that Denmark sent warships in last paragraph)

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