Maersk has released its Asia Pacific Market Update for July, warning that the months ahead will be challenging for carriers and businesses as Australia faces potential disruption.
The report focuses on the ongoing conflict in the Red Sea, which has caused industry-wide disruptions since December 2023, forcing vessels to take long diversions that are challenging supply chains globally.
The impact on Oceania’s ocean network is now prominent, due to congestion in Southeast Asian hubs, with these ports providing a crucial connection between Oceania’s cargo and Maersk’s global network.
“This is due to equipment shortages and constrained capacity from the Red Sea disruptions, which affects both alternative routes and transshipment hubs,” said Maersk.
“The delays in Southeast Asian hubs pose a risk of disruption at Australian ports due to vessel bunching on arrival, resulting in longer waiting times and other delays. The congestion and disruption have extended beyond the hubs and into Northeast Asia and Greater China ports, causing delays. Oceania exporters should factor in additional lead time as part of supply chain planning during this time.
“There are multiple reasons behind the domino impacts in these regions. First, hubs in Asia are being impacted with congestion across key ports, causing delays and bottlenecks to ripple through the entire system. Second, ocean networks have been reorganised with vessels being moved to different regions to better meet demand for capacity. This has led to a widening global impact that has affected regions that weren’t originally directly affected by the Red Sea disruption.”
Asia’s typhoon season, which is expected to impact East China and South China, may also create further risks of congestion.
Over the past three months, the total capacity in the Oceania network has reduced as vessels are diverted to higher-demand trade routes, while demand growth remains robust with a significant increase in Q1 of this year.
Routes from Oceania to Europe and the Middle East continue to experience tight capacity supply due to rerouting and port congestion, reports Maersk.
Market demand into India has increased significantly due to the free trade agreement between India and Australia, while strong Oceania demand for routes to the US East Coast and Latin America is indirectly impacted by disruptions in the Red Sea.
Asian exports are said to be more impacted than Asian imports due to Asian countries being major global exporters.
Speaking at a recent online customer event, Maersk CEO Vincent Clerc acknowledged the difficult situation for both carriers and businesses while highlighting the challenges ahead.
“We are faced with these challenges together and we need to make sure that we stay close to them as we handle the new set of circumstances that continues to unfold in front of us. These disruptions, and the impact they are having on your business, is not something that I, nor any colleagues at Maersk, take lightly. We know it is hard. We know it is difficult for you. We know it puts you under a lot of pressure,” he said.
“Today, all ships that can sail and all ships that were previously not well utilised in other parts of the world have been redeployed to try to plug holes. It has alleviated part of the problem, but far from all the problems across the industry, including for Maersk. We are going to have in the coming month missing positions or ships that are sailing that are significantly different sizes from what we normally would have on that string, which will also imply reduced ability for us to carry all the demand that there is.”
