Danish shipping line Maersk has warned its customers that disruption to Red Sea container shipping was rising. It predicted that this would reduce the industry’s capacity between Asia and Europe by between 15% and 20% during Q2 2024.
Maersk said in an updated advisory note that “the risk zone has expanded, and attacks are reaching further offshore. 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 operates some 730 container ships.
Maersk’s fuel costs on the affected routes between Asia and Europe are now 40% higher per journey, a spokesperson said.
Because of the rerouting of traffic away from the Suez Canal, Maersk estimated that the container industry’s capacity between Asia and northern Europe and the Mediterranean would be cut by between 15% and 20% in the second quarter.
Maersk said that the disruptions caused ripple effects across several other container freight routes, particularly from Asia to the east and west coasts of South America.
“We are doing what we can to boost reliability, including sailing faster and adding capacity,” Maersk said, noting that it had leased more than 125,000 additional containers.
Maersk delivered Q1 numbers in line with expectations showing a strong recovery in earnings compared to the fourth quarter of 2023. Results were driven by a good performance in Terminals and the combination of higher demand and a prolonged Red Sea crisis.
Ocean results were impacted by the situation in the Red Sea, with increased market rates and costs due to the supply chain disruptions. Maersk said that strong volumes, high capacity utilization and continued cost discipline ensured improved results compared to the previous quarter.
While over-supply remains a challenge and would eventually prevail, because of the Red Sea situation its impact has been delayed, the company said.
