AP Moller-Maersk A/S, a top container line, reports that maritime chaos in the Red Sea affecting 15 routes may persist for months.
These routes connect Asia, Europe, and the US East Coast to the Middle East. Over 150 tankers serving major ports like Singapore and Rotterdam face delayed arrivals.
Some delays extend into March. This disruption forces vessels to reroute around the Cape of Good Hope, significantly increasing travel distances.
Houthi attacks have made the southern Red Sea risky for ships. These vessels carry various goods, including oil and gas.
The US is actively trying to stop these attacks. Meanwhile, Houthi forces continue their assaults. This situation increases shipping costs and delays, impacting the global economy.
The Red Sea is vital for access to Egypt’s Suez Canal.
This canal shortens the Asia-Europe journey. Ships now avoid this quicker route, adding thousands of miles to their journey around Africa.
Since the week started, global carriers have redirected their ships. This move lengthens travel times for both merchant and energy vessels.
As a result, tanker traffic through the Bab al-Mandab Strait has plummeted.
Recently, an Equinor ASA-chartered tanker made a significant detour. It turned 180 degrees in the Red Sea, heading back towards the Suez Canal.
This rerouting occurs as the Panama Canal also faces threats. A severe drought has reduced its traffic, limiting water supply.
Unprecedented Rise in Shipping Costs
The Panama Canal, like the Suez, is crucial for global trade.
Global carriers are experiencing rising freight costs due to necessary detours around the Suez and Panama Canals.
Benchmarking against the crisis period of early 2020 shows that current rate increases are unprecedented.
In summary, the Red Sea’s maritime crisis shows how regional conflicts can have widespread effects.
They disrupt essential trade routes and have ripple effects across the global economy. As the situation unfolds, the world watches closely, hoping for a swift resolution.