Surge in Freight Rates and Cascading Effects

In recent months, due to security issues in the Red Sea, Maersk and other leading maritime companies have decided to reroute their ships around the Cape of Good Hope. This change has led to extended voyage times and consequently, a significant increase in freight rates. Danish logistics giant Maersk, in its latest advisory to customers, stated, "The expansion of the risk zone and the attacks reaching further out to sea have forced our ships to undertake longer journeys, resulting in additional time and costs."

Increase in Freight Costs

According to a Maersk spokesperson, fuel costs on affected routes between Asia and Europe have increased by 40 percent per journey. This hike is creating substantial impacts on global trade and logistics operations. German shipping company Hapag-Lloyd is also altering its routes and stated, "The attacks in the Red Sea and the Gulf of Aden are moving further out to sea, so we are completely avoiding this area."

Suez Canal and Alternative Routes

Maersk estimates that diverting traffic away from the Suez Canal will reduce the container sector's capacity between Asia and Northern Europe and the Mediterranean by 15 to 20 percent in the second quarter. This situation is causing ripple effects on many other container shipping routes, especially from Asia to the east and west coasts of South America.

Access to Europe and Ports

The French shipping company CMA CGM still sends some of its ships through the Red Sea, escorted by frigates from French and other European navies. However, the company's CEO Rodolphe Saade stated that most of their ships have diverted their route towards Africa. This change in routes brings new logistical challenges, such as the necessity to transship at ports not intended as final destinations. With Tangier at capacity, finding alternatives such as Algeciras or Valencia becomes essential.

Looking Ahead

Maersk is striving to enhance reliability by increasing voyage speed and capacity, having chartered over 125,000 additional containers so far. However, this crisis is expected to last at least until the end of 2024, which will continue to significantly affect the maritime sector and global trade.