Essential Updates on the Red Sea Situation
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The global logistics industry is currently navigating through unprecedented challenges due tothe ongoing situation in the Red Sea. The ripple effects are being felt on supply chains globally,including equipment and capacity shortages, delays, and additional costs.
At Maersk, we are committed to keeping you informed of these developments and the actions weare taking to mitigate the impact on your supply chain
The current situation and look ahead
To safeguard our crew, vessels, and our customers’ cargo, we have continued to sail around theCape of Good Hope, adding approximately 4,000 miles to the total voyage length, resulting inlonger voyage times and higher operational expenses. Currently, we are experiencing an average40% increase in fuel costs compared to when we sail through the Red Sea / Gulf of Aden.
With roughly 30% of global container traffic typically passing through the Suez Canal, changingto longer routes has severely disrupted global trade. For example, with vessels tied up on longerjourneys, we estimate there has been a 15-20% reduction in available industry-wide capacity in Q2of 2024.
The situation is also causing delays and congestion in key ports, including Singapore, Ningbo andShanghai. Operational bottlenecks, vessel bunching, as well as equipment and capacity shortagesare all leading to delays.
We anticipate that the disruptions will continue into the second half of 2024.
Impact on Our Customers
The Red Sea situation has led to major challenges across the industry with reduced capacity, longershipping times, and higher operational costs. Delays and longer transit times are affecting supplychains, inventory management, and production schedules globally.
We have implemented temporary surcharges to help cover these increased operational costs.We are continuously monitoring and adjusting surcharges as needed to ensure they are fair andreflective of additional costs.
How Maersk is responding to mitigate the situation
Maersk is working to improve resilience and minimise disruptions to our customers through keyinvestments as well as through ongoing operational adjustments. To increase shipping reliability,Maersk has added 125,000 additional containers to our fleet and are exploring further capacityenhancements.
We have also increased sailing speeds, where possible, to reduce the impact of disruptions.Although this increases fuel costs, it helps to reduce the impact of delays on customers’ supply chains.
Maersk continues to minimise logistics disruptions
Maersk is closely monitoring the Red Sea situation and making dynamic improvements to our network. These improvements increase efficiency and reduce logistics costs where possible. Logistics costs have been higher than normal throughout this period, but the investments Maersk has made in the region help customers maintain inventory flow and minimise delays. This alleviates customer risk and mitigates the negative impact of supply chain disruptions.
Alternative solutions to keep supply chain resilience
In addition to the multiple investments in our Ocean services, we continue to provide alternativeoptions to help customers minimise cargo delays and maintain flexibility.
Maersk Air door-to-door services provide fast and reliable services for urgent logistics needs tocustomers across a variety of industries and cargo types, featuring a comprehensive network withreach into more than 90 countries.
Maersk Sea-Air solution combines the cost-effectiveness of sea freight with the speed of airfreight, reducing transit time without drastically increasing costs. Maersk Sea-Air via Jebel Aliallows customers to ship from a network of ports across Asia Pacific to Jebel Ali, United ArabEmirates, with a transfer to air transportation to a wide range of final destinations across Europe.
Maersk Sea-Air via Tanjung Pelepas enables customers to transport goods from Asia Pacificports to Tanjung Pelepas via sea freight, and then transfer to all major airports globally throughSingapore or Kuala Lumpur airports
Maersk Cross-Border transportation has also implemented new routes from Xi’an and Yiwu, China,to Turkey, Georgia and Azerbaijan to help customers avoid disruptions. This route runs via blocktrain and provides further connections into Europe using Maersk’s Ocean services. This weeklyservice is operating now and represents a reliable and eco-friendly solution with cargo spaceguarantees
We urge our customers to stay informed through our regular updates and dedicated surchargespage on Maersk.com. We understand the importance of reliability and predictability for ourcustomers. We will continue to monitor the situation closely and keep you updated on anydevelopments as they occur.
More information on the evolving situation in the Red Sea can be found at:
- Red Sea / Gulf of Aden Situation
Contact us to learn how Maersk can help maintain a resilient supply chain
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