COPENHAGEN (Reuters) – Container shipping disruptions in the Red Sea are increasing and are expected to reduce the industry’s capacity between the Far East and Europe by around 15% to 20% in the second quarter, shipping group Maersk said on Monday.
Maersk and other shipping companies have been diverting ships around Africa’s Cape of Good Hope since December to avoid attacks by Iran’s Houthi militants in the Red Sea, with longer voyages driving up freight rates.
“The risk area has expanded and attacks are spreading further beyond the coast,” Maersk said in an updated message to clients on Monday.
“This has forced our vessels to extend their journeys even further, resulting in additional time and costs to get your cargo to its destination,” the company added.
The Danish company, considered a barometer of global trade, said last week that shipping disruptions caused by the attacks in the Red Sea were expected to last at least until the end of the year.
Side effects included bottlenecks and so-called congestion, when several ships arrive at a port at the same time, as well as a lack of equipment and capacity.
“We are doing everything we can to improve reliability, including speeding up shipping and increasing throughput,” Maersk said, adding that it has leased more than 125,000 additional containers so far.
“We have increased capacity where possible to meet the needs of our customers,” the company said.