Maersk Avoiding Red Sea Route Again

8 January 2024

Danish shipping giant Maersk is once again diverting all its container vessels from the Red Sea, and will reroute them around southern Africa for the foreseeable future, the company announced on 5 January.

The previous day, Maersk decided to reroute four out of five of its southbound container vessels that had already passed through the Suez Canal back north, so that they could make the journey around the Cape of Good Hope instead.

The decision has been made because of attacks on vessels by Houthi militants.

"The situation is constantly evolving and remains highly volatile, and all available intelligence at hand confirms that the security risk continues to be at a significantly elevated level," said Maersk, in a statement.

The Suez Canal is normally used by around one third of all container ship cargo.

Maersk had announced on 27 December 2023 that it would resume Red Sea operations, though competitors, including Germany’s Hapag-Lloyd, still considered it to be too dangerous.

The diversion means that, for sailings between Singapore and Rotterdam, for instance, the distance is increased from approximately 8,500 nautical miles to 11,800 nautical miles. In terms of the time taken, it will typically mean an increase of 12 days, from 26 up to 36 days.

The additional costs will, of course, be significant. News sources report that re-directing ships around southern Africa is expected to cost up to $1 million extra in fuel, for every round trip between Asia and Northern Europe.

Container spot rates on this route are soaring. The Loadstar cites the example of Drewry’s WCI Asia-North Europe component being up 115% in a week, and up 91% year on year, for an average of £2,809 per 40-foot container, with the WCI spot for Mediterranean ports up 114% and 43% respectively, to £3,281 per 40-foot container.

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