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Maersk warns Red Sea shipping delays could run into the second half of the year

Red Sea Delays

Shipping giant Maersk, the second-largest ocean carrier in the world, has warned that Red Sea diversions could carry over into the second half of the year, telling its customers to plan for further disruption and delays.

Yemen rebel group, Houthis, recently vowed to continue attacks on commercial shipping routes in the Red Sea following dozens of attacks and hijackings in response to the war in Gaza.

The conflict has caused major shipping companies to avoid one of the world’s busiest shipping lanes – which sees an estimated 12 percent of global trade passing through each year – instead taking long detours around the southern tip of Africa which is causing significant delays worldwide.

Maersk suspended transits through the Red Sea and Gulf of Aden in January in response to attacks on its vessels.

As recently reported by PASA, experts have warned of a “perfect storm” and further supply-chain related price hikes, with the cost of shipping continuing to rise as a result of increasing strain.

Adding to current shipping delays, restrictions in the drought-affected Panama Canal have had a significant impact on daily traffic quota passing through the narrow waterway following record-breaking low water levels.

In an official statement, Maersk’s Head of North America, Charles van der Steene said, “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.” 

The Copenhagen-based company confirmed that it has added around 6 percent in extra vessel capacity to offset delays due to longer transit times around Africa, which has added to operational costs.

Speaking to CNBC, van der Steene said, “Many of our customers factor a cost per unit cost for their supply chain into their budgeting, which basically is what they need to make their results work. If that fundamentally shifts and changes, it could have a pretty significant effect on their overall costs.”

He also added that concerns surrounding the drought-levels in the Panama Canal haven’t gone away.

“It has stabilised in the sense that people know what to expect, but we don’t know if this might potentially be recurring on an ongoing basis in the future.” 

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