Maersk has warned of widening impacts of the Houthi attacks on shipping in the wake of the Yemeni militant group’s strike of an MSC ship more than 300 miles east of Somalia.
The container shipping giant’s warning comes days after Houthi military spokesperson Yahya Saree said the rebel faction would expand its range of drone and missile attacks into the eastern Mediterranean Sea, targeting vessels headed for Israeli ports.
“The risk zone has expanded, and attacks are reaching further offshore,” Maersk said in a customer advisory Monday. “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.”
According to Maersk, the company is currently using 40 percent more fuel per journey, with charter rates currently three times higher—often fixed for five years—than prior to the diversions.
Maersk already said it expects the Red Sea disruptions to continue into the second half of 2024, and has reiterated that its vessels will reroute around southern Africa’s Cape of Good Hope “for the foreseeable future.”
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The knock-on effects of the mass rerouting have included bottlenecks and vessel bunching, as well as delays and equipment and capacity shortages, Maersk says.
Across the entire container shipping industry, the ocean carrier estimates second-quarter capacity losses of 15 percent to 20 percent on the Far East to North Europe and Mediterranean trade lanes due to the lengthier routes.
Maersk should be able to weather the storm of the short-term capacity losses, already establishing in its recent earnings report that its own oversupply of vessels “remains a challenge.” The company said the impacts of more capacity, like lower freight rates, are expected to be delayed due to the Red Sea skirmishes.
To add more capacity in line with customers’ immediate needs, the container shipping company leased more than 125,000 additional containers.
These could come at a hefty cost, says container leasing and trading platform Container XChange, particularly out of China. According to a China-based customer of the company, prices for a 40-foot container out of the country jumped from $2,200 to $2,300 in April to $2,500 to $2,700 currently.”
“A substantial number of containers are stranded in network locations with a structural surplus of container inventory,” said Container XChange’s May market forecaster. “Shipping these containers out may not be economically feasible due to factors such as high transportation costs, inexpensive storage at the location or the containers nearing the end of their operational life.”
Maersk will also be increasing select surcharges to offset the costs of the longer journeys, increased sailing speed and additional fuel costs.
While Maersk reduced peak season surcharges recently across several service lines in March and April, the carrier is increasing them again to help cover the additional costs. Maersk expects to review the surcharges regularly.
Maersk expects Baltimore return by June
The Red Sea hasn’t been the only area where Maersk has had to recently rethink operations. More than a month after one of its chartered container ships, the Dali, crashed into and wrecked the Francis Scott Key Bridge in Baltimore, the company’s vessels may be returning to the area.
Based on the Maersk network team’s review of the cleanup effort after the bridge’s collapse, the carrier’s vessels could start arriving at the Port of Baltimore by the end of May or early June, according to a report from CNBC. In the time since the March 26 incident, the ships have been diverting to various ports including the Port of New York & New Jersey, the Port of Virginia and the Port of Philadelphia.
Maersk may be able to set a timeline on returning to the port in the next week or so, Charles Van der Steene, president of Maersk North America, told the network.
Unified Command, the government entity in charge of the bridge’s response and recovery efforts, must first authorize the reopening of the port.
Unified Command has said the goal is to refloat the Dali by May 10, with the main goal to have the main 50-foot-deep shipping channel set to reopen by the end of May. The team is currently cleaning wreckage of the bridge, and has opened up multiple shipping channels so vessels idling in the harbor could finally exit on their route.
The Francis Scott Key Bridge is expected to be rebuilt and reopened by fall 2028.