Red Sea disruption to stretch into Q3 says Maersk CEO

Reuters/Fabian Bimmer

• Maersk vessels continue to divert
• Extra costs may remain after crisis
• Price per container up ‘significantly’

Disruption in the Red Sea is expected to stretch into the third quarter of 2024, making the situation challenging for carriers and businesses, Danish shipping major Maersk CEO Vincent Clerc has said.

“For the time being, Maersk ships are continuing to divert around Africa via the Cape of Good Hope in South Africa,” he said, adding that the continuing attacks on ships in the Red Sea/Gulf of Aden have created challenges for logistics and supply chains.

Another major challenge for carriers has been increased costs, Clerc said.

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“With cargo journeys lengthened and capacity squeezed, the price per container has risen significantly. We have taken on these costs knowing that many of them will remain beyond the Red Sea situation.”

Houthi rebels in Yemen began attacking commercial ships last November, in what they claim is a show of support for Palestinians in the Israel-Hamas war.

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In May, Maersk said that the Red Sea disruption is anticipated 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.

Clerc said that Maersk will only return to sailing via the Red Sea/Gulf of Aden when the safety of seafarers, vessels, and cargo is guaranteed.

He said that once a resolution is found, ships could almost immediately return to sailing their usual routes through the Suez Canal.

He warned that there would be a period during which the ships on these different routes would be arriving at ports at similar times, which is expected to cause congestion before a more stable scenario returns.