Ocean carrier Maersk is raising renewed concerns over Houthi rebel attacks on vessels in the Red Sea, warning of increased shipping delays, higher costs, and capacity shortages as the crisis persists.
According to a May 6 release from the company, the situation in the Red Sea has “intensified” in recent months. Maersk also says that vessels will likely continue rerouting around Africa’s Cape of Good Hope “for the foreseeable future.”
“The risk zone has expanded, and attacks are reaching further offshore,” Maersk said. “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 — the second largest container line in the world — projects an industry-wide capacity loss of 15-20% for the Far East to North Europe and Mediterranean market during the second quarter of 2024. In the meantime, it said it plans to increase its capacity after leasing more than 125,000 additional containers to take advantage of tripling freight rates, in an effort to offset the cost of the longer journey around the Cape, which uses 40% more fuel.
In its Q1 earnings report released on May 2, the company said it expected fallout from the crisis in the Red Sea to continue for most of the year.
