Maersk: Red Sea Disruptions To Persist Through 2024

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  • Maersk is planning for disruptions brought on by the crisis in the Red Sea to potentially last through the end of 2024.
  • In its earnings report, Maersk detailed how rebel Houthi attacks on vessels in the Red Sea have continued to increase costs across the industry.
  • As ocean carriers such as Maersk have had to reroute ships thousands of miles around Africa’s Cape of Good Hope, freight rates have gone up to account for the longer trips.

Container shipping major A.P. Moller-Maersk expects disruptions in the Red Sea and Gulf of Aden to continue through the second half of this year, Engine.

Red sea shipping disruptions to persist

The company is ready for the current rerouting of vessels via the Cape of Good Hope to be extended potentially until the end of this year, Maersk said in its quarterly financial statement.

It has been 166 days since Yemen’s Houthi rebel group began attacking commercial ships in the southern Red Sea and Bab al-Mandeb Strait. The ongoing Houthi attacks have forced shipowners like Maersk to avoid transits through the Suez Canal, resulting in the redirection of trade routes from the Far East to Europe and the US East Coast to the longer path via the Cape of Good Hope in Africa.

The longer Horn of Africa route adds 7-14 days to the journey compared to the Suez Canal route. This has caused container ships to sail significantly longer distances, leading to an 11% increase in the average distance covered compared to routes in early 2023, according to a report by Xeneta.

Ships also sail at higher speeds to compensate for longer distances, which drives up their bunker fuel consumption, Xeneta added. This route diversion has resulted in higher bunker fuel consumption in the past three months, Maersk noted.

Maersk consumed 2.8 million mt of bunker fuel across its fleet in the first quarter of 2024, up around 12% from 2.5 million mt in the last quarter of 2023.

Increased bunker fuel consumption combined with a longer distance can drastically increase a vessel’s greenhouse gas (GHG) emissions.

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Source: Engine