Red Sea Turmoil: Maersk to cut Asia-Europe shipping capacity by 20%

Posted on May 14, 2024   |  

Maersk projects a surge in disruption to Red Sea container shipping, anticipating a potential 20% decrease in industry capacity between Asia and Europe.

Shipping firms, including Maersk, have altered vessel routes to circumvent the Red Sea via Africa's Cape of Good Hope since December, aiming to evade attacks by Houthi militants.

The extended voyage durations resulting from these route changes have driven up freight rates, impacting the industry significantly.

Maersk's fuel expenses on affected routes between Asia and Europe have soared by 40% per journey, adding to operational challenges.

Hapag-Lloyd, headquartered in Germany, maintains optimism that the crisis may be resolved by the conclusion of 2024, opting for temporary vessel reroutes as well.