Red Sea disruptions ripple across global shipping

Denmark’s AP Moller-Maersk said on Wednesday that disruption to its container shipping via the Red Sea had extended beyond trade routes between the Far East and Europe to its entire global network.

Shipping groups have diverted vessels around Africa’s Cape of Good Hope since December to avoid attacks by Houthis in the Red Sea, with the longer voyage times pushing freight rates higher.

Global supply bottle-necks

Maersk warned on July 1 the coming months would be challenging as disruptions to shipping via the Red Sea continue.

“The cascading impact of these disruptions extends 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,” it said on Wednesday.

“Ports across Asia, including Singapore, Australia, and Shanghai, are experiencing delays as ships reroute and schedules are disrupted, caused by ripple effects from the Red Sea,” it said in a statement.

As an example, Maersk said its Oceania network was hit by congestion in Southeast Asian hubs caused by equipment shortages and capacity constraints due to the Red Sea disruption.

“The delays in Southeast Asian hubs pose a risk of disruption at Australian ports due to vessel bunching on arrival, resulting in longer waiting times and other delays,” it added.

“The congestion and disruption have extended beyond the hubs and into Northeast Asia and Greater China ports, causing delays.”

Maersk increases container procurements

Maersk said ocean cargo demand remained robust globally, and the group was working to limit disruptions to customers, partly by securing additional containers.

“We are preparing for continued disruptions by adjusting our network and supply strategies accordingly,” it added.

Shares in the company, which was not immediately available for further comment, were down 1.5 per cent at 0904 GMT.

Read: How have global shipping firms reacted to Red Sea tensions?