The world's largest shipping company Maersk warns: Red Sea crisis impact, Q2 industry capacity may decrease by 20%

Maersk, the world's largest shipping company based in Denmark, stated on Monday that armed disturbances in the Red Sea region are intensifying, with an expected 15%-20% reduction in container shipping capacity between Asia and Europe in the second quarter of the industry.

Maersk also informed its customers that fuel consumption for vessels bypassing the Cape of Good Hope in Africa has increased by 40% compared to normal, and current charter rates are three times higher than usual, with charter periods typically lasting up to five years.

"We are doing everything we can to improve reliability, including increasing sailing speeds and adding capacity. So far, the company has leased an additional 125,000 containers." Maersk added.

Maersk stated, "Where possible, we have increased capacity based on customer demand."

On January 5th this year, Maersk announced the suspension of Red Sea shipping "for the foreseeable future," rerouting via the Cape of Good Hope in Africa to avoid attacks by Houthi armed groups in the Red Sea. However, due to the longer journey after rerouting to the Cape of Good Hope, freight costs have increased.

In February, Maersk believed that the Red Sea crisis could continue into the second half of this year. Then on May 2nd, Maersk revised its statement to "at least until the end of this year."

Apart from Maersk, most global shipping companies have also suspended Red Sea voyages. German shipping giant Hapag-Lloyd decided in January to indefinitely reroute its vessels via the Cape of Good Hope and warned that the impact of the rerouting would be evident in the first quarter. The company stated on March 14th that the Red Sea disruption and global oversupply of vessels will force it to cut costs by 2024, including adjusting sailing routes