18-03-2025
Maersk Shareholders Vote Against Halting Military Equipment Shipments to Israel
Maersk shareholders voted down two separate investor proposals related to the ocean carrier's shipments of military equipment to Israel at the company's annual meeting Tuesday.
The votes were tallied the day after Israel resumed airstrikes in Gaza, breaking a two-month ceasefire between the country and Palestinian governing group and terrorist organization Hamas.
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More than 400 Palestinians have been killed in the attacks, according to Gaza's health ministry. This marks the largest single-day death count in the region since Nov. 7, 2023—one month after the Israel-Hamas war began.
The first proposal, led by activist group Ekō, the Palestinian Youth Movement (PYM) and Danish shareholder Zen Donen, urged Maersk to disclose its human rights due diligence as part of a wider plea to end arms transfers to Israel.
According to a statement from Ekō, more than 70 civil society organizations including Amnesty International and Oxfam backed the shareholder resolution calling for transparency.
A second proposal from Danish shareholder group Kritiske Aktionærer and chairman Frank Aaen specifically called on the container shipping giant to halt shipments of arms to Israel.
Maersk has denied the claims, stating that it is only carrying military equipment to the country, not weapons or ammunition.
'The premise of the [second] proposal is not correct, as the company is not transporting arms to Israel,' Maersk said.
The Maersk board did not support either proposal.
The first proposal sought disclosures into details like how Maersk identifies, assesses and mitigates actual and potential human rights impacts, including those associated with the logistics of shipping military equipment and arms.
The activists also sought to gain detailed actions and strategies for heightened due diligence employed by the company for contracts and projects that carry high risks of human rights violations. The proposal sought that the disclosed information would be updated and published at least once a year.
Ahead of the meeting, Ekō pushed back against Maersk's denial, although the ocean carrier's shipments appear to be largely vehicles and related sub-components.
The activist group cited an article from Denmark-based investigative publication DanWatch, which obtained more than 2,000 bills of lading from ImportGenius to find hundreds of shipments from Oshkosh Defense, a tactical military vehicles manufacturer.
According to the article published Feb. 9, 14 different Maersk-owned container ships across 43 trips transported thousands of tons of military equipment during the first year of the war. Military equipment such as sub-components for armored personnel carriers, combat vehicles, missile casings and other goods for military use were included, DanWatch said.
After the Monday night airstrikes took place, Danish Palestine support movement Stop Annekteringen af Palaestina (Stop the Annexation of Palestine) said a demonstration will be held Tuesday outside Maersk's headquarters in Copenhagen.
A prior demonstration already took place at the headquarters on Feb. 24, attracting nearly 1,000 protesters.
The Israel-Hamas war has not only put Maersk under the activist microscope—it has shaken up the global shipping landscape, in that is the primary catalyst of the current Red Sea crisis.
In support of Palestinians, the Yemen-based Houthi movement began attacking commercial vessels with missiles and drones in late 2023 around the Red Sea, the Bab el-Mandeb Strait and the Gulf of Aden. The onslaught lasted throughout 2024.
This effectively forced all container shipping companies to avoid traversing through the Suez Canal, instead opting to reroute around southern Africa's Cape of Good Hope. That adds anywhere between one and two extra weeks of extra travel time for cargo on vessels, particularly causing some hiccups in Asia-to-Europe trade.
In the annual general meeting, Maersk chair Robert Uggla pointed out that a vessel sailing from Shanghai to Rotterdam now must travel 13,000 extra kilometers (8,100 extra miles) due to the mass rerouting.
Despite a 10 percent global fleet expansion, 'vessel capacity remained tight in 2024,' Uggla said. The tightened capacity contributed to separate spikes in ocean spot freight rates throughout last year, and is likely preventing rates from plummeting to the more subdued levels it experienced in 2023 across most trade lanes.
The increasing freight rates were a boon to the container shipping industry at large, which generated $15.8 billion in net income (not including privately owned Mediterranean Shipping Company) in the fourth quarter alone, according to analysis pulled together by industry expert John McCown. Across the whole of 2024, McCown pointed out that industrywide net income total $58.3 billion.
Due to the uncertainty surrounding the ceasefire, Maersk and its ocean carrier rivals have not committed to a Red Sea return.
The combination of the Israeli airstrikes in Gaza and the U.S. airstrike of the Iran-backed Houthis just two days prior represents a major blow to near-term stability in the region. Without any security guarantees, as well as elevated war-risk insurance premiums still in place, container shipping is unlikely to make a return.
