Ocean shipping company 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 for the first quarter of 2024 released on May 2, 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. Moving forward, the company says it expects this situation to persist “for most of the year.”
“We have only seen an escalation of the situation in the area, and therefore we can see that not only Maersk but all shipping lines have adjusted their networks more or less permanently,” Maersk CEO Vincent Clerc told Reuters.
Despite those disruptions, Maersk still lowered its expected operating loss for the year from $5 billion to between zero and $2 billion, based on strong market demand with a projected growth in container freight volume of up to 4.5%. The company also increased the low end of its estimate for its full-year earnings from $1 billion to $4 billion.
