Red Sea disruption to hit capacity by 20% says Maersk

Ritzau Scanpix/Emil Helms via Reuters

• Risk zone has ‘expanded’
• Vessels on Cape of Good Hope route
• Charter rates three times higher

Danish shipping major Maersk expects Red Sea disruption to lead to a 15 to 20 percent industry-wide capacity loss on the Asia to North Europe and Mediterranean routes in the second quarter of 2024.

The complexity of the situation in the Red Sea has intensified over the last few months, the company said in an advisory to its customers.

It added that vessels had been rerouted around the Cape of Good Hope for the “foreseeable future”.

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“However, the risk zone has expanded, and attacks are reaching further offshore,” Maersk said. “This has forced our vessels to lengthen their journey further, resulting in additional time and costs to get your cargo to its destination for the time being.”

Maersk said it is currently using 40 percent more fuel per journey and charter rates are three times higher, often fixed for five years.

“We are doing what we can to boost reliability, including sailing faster and adding capacity,” the company said, adding it had leased more than 125,000 additional containers so far.

Maersk introduced a transit disruption surcharge to cover extra costs associated with the longer journey, and a peak season surcharge from the start of this year. 

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In its financial 2024 guidance issued this week, the company said that the ongoing Red Sea/Gulf of Aden situation is expected to continue into the second half of the year. 

“Over-supply remains a challenge and will eventually prevail, but the impact is delayed,” it said.

German shipping company Hapag-Lloyd also said this week it is avoiding the Red Sea and Gulf of Aden as attacks are moving “further and further out to sea”. 

However, the company said the attacks had not spread to the Mediterranean Sea.

Statistics from the International Monetary Fund’s PortWatch platform in March revealed that Suez Canal trade dropped by 50 percent in the first two months of 2024 from a year earlier, while trade through the Panama Canal fell by 32 percent, disrupting supply chains and distorting key macroeconomic indicators.

Middle East goods export volumes, which include oil and gas, are forecast to expand 3.5 percent this year, the World Trade Organization said in April, adding that it believed disruptions to Red Sea maritime trade was proving less severe than feared.

The WTO’s Global Trade Outlook and Statistics report said this expected increase contrasts with a 1.6 percent decline in Middle East goods exports in 2023, the third annual contraction in the past four years.