Shipping disruptions now affect Maerk’s global trade routes amid Red Sea crisis

SINGAPORE (ICIS)–Shipping disruptions affecting Maersk’s container shipping operations because of the Red Sea crisis have extended beyond the Far East-Europe routes to its entire global network, the shipping and logistics giant said.

The fallout of the Red Sea crisis is continuing to cascade across the world, forcing vessels to temporarily divert and take longer routes around the Cape of Good Hope, thereby causing unprecedented challenges for global supply chains.

The disruptions now extend beyond the primary affected routes, causing congestion at alternative routes and transshipment hubs essential for trade with Far East Asia, West Central Asia, and Europe, Maersk said in a statement on 17 July.

Ports across the Asia Pacific, including Singapore, Australia, and China, are experiencing delays due to congestion.

The coming months will be challenging for carriers and businesses alike, as the Red Sea situation stretches into the third quarter of this year, Maersk CEO Vincent Clerc said.

Maersk operates around 740 ships across its various divisions, including container ships, tankers, and other specialized vessels.

Extending rotations to travel the longer route around Africa takes two to three ships, depending on the trade in question, he said.

“We are going to have in the coming month missing positions or ships that are sailing that are significant different size from what we normally would have on that string, which will also imply reduced ability for us to carry all the demand that there is,” Clerc said.

The availability of additional capacity was low to begin with and, across the industry, carriers’ ability to bring in extra tonnage has been limited, he said, adding that at the same time, demand for container transport has remained strong.

ASIA EXPORTERS’ WOES TO CONTINUE
For Asia, the impact of the ongoing Red Sea Crisis is more on exports rather than imports, Maersk said.

This is primarily because Asian countries are major global exporters. China, Asia’s biggest economy and the second-biggest in the world, is also the largest exporter to many Asian countries.

Routes between the Far East – which spans east southeast Asia – and Europe via the Suez Canal have been directly impacted, with disruptions in the Red Sea affecting most trade routes.

“First, hubs in Asia are being impacted with congestion across key ports, causing delays and bottlenecks to ripple through the entire system,” Maersk said.

“Second, ocean networks have been reorganised with vessels being moved to different regions to better meet demand for capacity.”

This has led to a widening global impact that has affected regions that weren’t originally directly affected by the Red Sea disruption.

Intra-Asia shipping routes are also facing equipment shortages, especially out of China, impacting the entire industry.

Initially affecting long-haul routes, the scarcity now extends to shorter regional routes.

This leaves carriers like Maersk with a difficult choice: prioritize returning empty containers to China or shipping full containers to other destinations, both options translate to increased costs and contributing to further supply chain disruptions.

“We are also approaching typhoon season, which is expected to impact East China and South China, creating further risks of congestion,” the shipping giant said.

Focus article by Nurluqman Suratman