Red Sea disruptions, shipping delays could last for months: Maersk

In this photo provided by the Indian Navy on Saturday, Jan. 27, 2024, a view of the oil tanker Marlin Luanda on fire after an attack, in the Red sea. The crew aboard a Marshall Islands-flagged tanker hit by a missile launched by Yemen’s Houthi rebels is battling a fire onboard the stricken vessel sparked by the strike. (Indian Navy via AP)

Maersk has warned of disruptions to container shipping via the Red Sea dragging into the second half of the year and of heavy congestion and delays for U.S.-bound goods.

Major container shipping companies have switched away from the Red Sea and Suez Canal to the longer route around Africa's Cape of Good Hope following attacks on shipping by Houthi militants.

"Be prepared for the Red Sea situation to last into the second half of the year and build longer transit times into your supply chain planning," Maersk's head of North America, Charles van der Steene, said in a statement on Tuesday. Maersk, a bellwether for global trade, has added about 6 per cent in vessel capacity to offset delays as vessels take the longer route around southern Africa, it said.

The Copenhagen-based company also told customers, which include retail giants such as Walmart and Nike, to prepare for higher supply chain costs. Longer sailing times have already boosted freight rates.

"Many customers factor a cost per unit into their budgeting, and if that fundamentally changes due to all of this volatility, it could have a big impact on overall costs," van der Steene said.

Longer sailing times around Africa have also meant significant delays for vessels bound for the U.S. East Coast, said Maersk, advising customers to consider alternative ports in Mexico, the Pacific Northwest, and Los Angeles for goods bound for the East Coast.

Heavy congestion in Oakland, California, have also resulted in delays for container vessels returning to Asia to pick up goods, Maersk noted.