Maersk to avoid Red Sea amid escalating tension

Maersk set to avoid Red Sea amid ongoing crisis

A.P. Moller-Maersk (Maersk) has informed its customers that it will be rerouting its cargo ships to sail around the Cape of Good Hope for the foreseeable future.

The decision has been made to ensure the safety of crew, vessels, and customers’ cargo amidst industry-wide disruptions.

An official statement from Maersk said: “The risk zone has expanded, and attacks are reaching further offshore. 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.”

READ: Maersk pauses activity around Red Sea

The situation has resulted in bottlenecks and vessel bunching, as well as delays, equipment, and capacity shortages. Maersk expects an industry-wide capacity reduction of 15-20 per cent in the Far East to North Europe and Mediterranean market in Q2.

Maersk responded by adding capacity, leasing more than 125,000 additional containers so far. To balance the increased costs, surcharges have been applied to invoices, including a 40 per cent rise in fuel consumption and a tripled charter rate. Although the Peak Season Surcharge (PSS) was briefly decreased, it has now been reinstated.

Recently, the Danish giant achieved a first quarter that met expectations, with profitability recovering well compared to the fourth quarter of 2023.

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