Supply chain tension continues as Maersk plans to bypass the Red Sea and detour through Africa

Shipping giant Maersk announced a change in route, further exacerbating the risk of global supply chain disruptions.

According to media reports on Tuesday, Maersk, the operator of the world's second-largest container fleet, stated that due to the highly tense security situation, vessels originally scheduled to pass through the Red Sea will now detour around the Cape of Good Hope. This means that shipping costs will increase and delivery times will be delayed.

Maersk's decision is similar to the actions taken by other shipping groups. On Monday, Germany's Hapag-Lloyd changed the routes of all its vessels to pass through the Cape of Good Hope, and Mediterranean Shipping Company (MSC) decided to change some of its routes on Friday.

Last Friday, Maersk issued a statement saying that due to the recent escalation of conflicts in the Red Sea, it has suspended all planned voyages in the Red Sea and the Strait of Mandeb for safety reasons.

The Strait of Mandeb, Red Sea, and Suez Canal serve as a vital transportation hub connecting Asia, Africa, and Europe. It is one of the busiest shipping routes in the world, and the passage conditions of this route are crucial to the international supply chain. Lasse Kristoffersen, CEO of Wallenius Wilhelmsen, a shipping company, stated:

We will continue to closely monitor the situation and maintain contact with authorities, industry organizations, and all relevant peers. The detour is expected to add one to two weeks to the voyage.

Michael Aldwell, Executive Vice President of Swiss logistics group Kuehne+Nagel, said that about 19,000 ships pass through the Suez Canal each year, and it usually takes 30 to 40 days to complete a voyage from Asia to Europe. Choosing an alternative route from Asia to Europe could potentially extend the voyage by three to four weeks.

As mentioned in a previous article, the International Chamber of Shipping warned that avoiding the Suez Canal and detouring around the southwestern tip of Africa at the Cape of Good Hope would increase shipping costs, prolong shipping days, and consequently delay delivery times.

Zheshang Securities pointed out that as shipping giants continue to avoid the Red Sea, container transportation has been affected in practice. The European market is expected to experience short-term upward momentum, as detours by shipowners increase shipping days and potentially boost container shipping rates.

In addition, air freight is also expected to benefit from this vessel detour in the short term. Due to the detour of European-bound container ships, there is a possibility of some cargo being redirected to air freight. Coupled with the peak season for Christmas stocking, this is expected to further drive up air freight rates.