Source: Zhitong Finance
Global shipping giant MAERSK (MAERSK), headquartered in Denmark, said on Monday that armed interference with container shipping routes in the Red Sea region is intensifying.
Global shipping giant headquartered in Denmark$A.P. Moller - Maersk A/S Unsponsored ADR (AMKBY.US)$It said on Monday that armed interference with container shipping routes in the Red Sea region is intensifying, and the industry's container shipping capacity between the Far East and Europe is expected to decrease by about 15% to 20% in the second quarter. Since December of last year, Maersk and other shipping companies have diverted their ships to the vicinity of the Cape of Good Hope in Africa to avoid being attacked in the Red Sea by the Houthis allied with Iran. However, due to the longer voyage after the diversion to Cape of Good Hope, freight costs are higher.
“The risk area has been further expanded, and attacks are spreading further offshore,” Maersk said in an updated customer consultation on Monday. The shipping giant added: “This has forced our vessels to further extend their voyage, causing a temporary increase in the additional time and costs our customers incur when their goods reach their destination.”
The Danish shipping giant, regarded as a barometer of global trade, said last week that shipping disruptions caused by the Red Sea shipping crisis are expected to continue at least until the end of this year. The ripple effects include capacity bottlenecks and so-called ship clusters, that is, the congestion of several ships in key regions and a sharp increase in the time required to reach ports, as well as a shortage of equipment and capacity.
Maersk said in a statement: “We are doing everything we can to improve the reliability of shipping concentration tanks, including increasing the speed of navigation and increasing the capacity scale.” Maersk also added that up to now, the company has leased more than 125,000 additional containers.
“We have increased production capacity in line with customer demand in a situation where the outlook is likely to improve,” the company said.
Since the outbreak of a new round of conflict between Israel and Kazakhstan, the Houthis have continuously attacked ships “linked to Israel” in the Red Sea on the grounds of “supporting Palestine.” This has forced global shipping giants to avoid the Red Sea and bypass the Cape of Good Hope, increasing transportation costs and causing delays.
According to information, taking a detour to the Cape of Good Hope often means that container shipping fleets on European routes and Mediterranean routes need to sail at sea for about 15 more days, with an additional sailing distance of about 8,000 kilometers. The potential additional freight costs may be as high as 1.8 million US dollars. According to a report released by S&P Global Market Intelligence (S&P Global Market Intelligence) on December 26 last year, a temporary detour decision like this is likely to increase shipping costs by more than 15%.