Maersk noted that while the peak season surcharge was recently reduced, it has been increased again to lend a hand cover additional costs resulting from the changes. Image for representational purposes only. File | Photo credit: CV Subrahmanyam
Global shipping leader Maersk estimates that industry-wide capacity loss in the Far East towards Northern Europe and Mediterranean markets, mainly between Asia and Europe, will be 15-20% in the second quarter of this financial year. This is due to the crisis in the Red Sea, which it says has intensified over the past few months.
“To protect our crew, ships and cargo, we are re-routing around the Cape of Good Hope in the near future. However, the risk zone has expanded and attacks are reaching further from the shore. This has forced our vessels to further extend their journeys, resulting in additional time and costs for the time being to deliver the cargo to its destination,” Maersk said in its latest advisory issued on May 6.
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It has been noted that the impact of the situation in the Red Sea is deepening and continues to cause disruption across the industry.
Maersk raises fees
Since the start of the Israeli offensive in Gaza, there have been a series of missile and drone attacks on commercial vessels belonging to entities linked to Israel by Yemen’s Houthi rebels.
Discussing the impacts of the situation in the Red Sea, Maersk said they include bottlenecks and clusters of vessels, as well as delays and equipment and capacity shortages. As a result, Maersk rented over 125,000 additional containers.
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The company informed customers that the appropriate surcharges will be apparent on the latest invoices. “They are intended to offset the costs of longer journeys, increased shipping speeds and additional fuel costs. For example, we now apply 40% more fuel per trip, and charter rates are now three times higher, often fixed for five years,” he said.
Maersk noted that while the peak season surcharge was recently reduced, it has been increased again to lend a hand cover additional costs resulting from the changes.
Securing the Red Sea
In response to the escalation of missile and drone attacks from Houthi-held areas, US Secretary of Defense Lloyd J. Austin announced the launch of Operation Prosperity Guardian on December 18. The operation constitutes “a major novel multinational security initiative under the umbrella of the Joint Committee on Maritime Forces and the leadership of their Task Force 153, which focuses on security in the Red Sea.
India, although not joining the US-led initiative, has increased its presence in the North Arabian Sea, the Horn of Africa and the Gulf of Aden to provide assistance to ships under fire as well as to address the escalate in piracy in Somalia. A few months ago, at the height of tension in the region, as many as 12 frontline warships were deployed to conduct maritime security operations.
From mid-December to March 23, under the second phase of the Indian Navy’s Operation Sankalp, over 5,000 personnel were deployed at sea, with over 450 ship days (of which over 21 ships were deployed). The maritime surveillance aircraft has completed 900 hours of flights to address threats in the maritime domain, Adm. told the media. R. Hari Kumar, then Chief of Navy, now retired.
