Supply chains warned of further disruption and costs as Red Sea risk zone widened

Danish shipping firm Maersk has warned that supply chains face further disruption amid longer journey times and extra costs for ships re-routed around the Cape of Good Hope to avoid a wider area of the Red Sea now at risk of attack from Houthi militants.

Maersk said the disruption is likely to reduce industry-wide capacity by 15% to 20% on routes between the Far East and North Europe and Mediterranean during the second quarter of this year.

In an update to customers, Maersk said the risk zone for ships in the Red Sea and Gulf of Aden has expanded as Houthi-led attacks reach 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,” it told customers, adding that this has caused bottlenecks and vessel bunching, as well as delays and equipment and capacity shortages.

Maersk said it will increase surcharges for shipments to offset the costs of longer journeys and increased sailing speeds. It told customers it is using 40% more fuel per journey to avoid further delays.

The Peak Season Surcharge, first introduced in January 2024 to counter the extra costs of diverting from the Red Sea route, will increase from 11 May.

Maersk said the complexities of operating in the Red Sea region have intensified over the last few months and cargo ships will continue to be re-routed around the Cape of Good Hope “for the foreseeable future”.

“We are developing solutions with the goal of offering our customers greater reliability for their supply chains,” it assured customers. “We are doing what we can to boost reliability, including sailing faster and adding capacity.”