In the latest Maersk Asia Pacific Market Update, we delve into the critical issues impacting supply chains, with insights to help you stay informed and keep your cargo moving efficiently. The resilience of your supply chain is our top priority, especially amidst the current geopolitical tensions, climate change, and the ongoing disruptions in the Red Sea.
Since December 2023, the Red Sea situation has caused widespread industry disruptions. Ships have been forced to divert around the Cape of Good Hope, extending routes and creating unprecedented challenges. Maersk CEO Vincent Clerc highlighted the cascading impacts during a recent online event, noting the significant strain on both carriers and businesses. He emphasized that Maersk ships continue to reroute around Africa, acknowledging the difficulty this poses for everyone involved.
Clerc stated, “These disruptions, and the impact they are having on your business, is not something that I, nor any colleagues at Maersk, take lightly. We know it is hard. We know it is difficult for you. We know it puts you under a lot of pressure.” The extended rotations around Africa require two to three additional ships per trade, which complicates the already tight capacity situation.
Asian exports are particularly affected, given the region’s status as a major global exporter. Routes between the Far East and Europe via the Suez Canal are severely impacted, but the ripple effects have reached the entire ocean network. For instance, congestion in Southeast Asian hubs is affecting the Oceania network, leading to vessel bunching and longer waiting times at Australian ports.
The domino effect of these disruptions is multifaceted. Key Asian ports are experiencing congestion, causing delays and bottlenecks throughout the system. Ocean networks have been reorganized to better meet capacity demands, spreading the impact to regions initially unaffected by the Red Sea disruptions.
Maersk is actively working to minimize these disruptions through investments and operational adjustments. Efforts include securing additional containers and exploring further capacity enhancements. We are also preparing for continued disruptions by adjusting our network and supply strategies to align with business demands for capacity.
Key updates from Maersk’s latest report include:
- Far East to North Europe: Capacity remains tight, with industry-wide losses and strong demand persisting.
- Far East to Mediterranean: Similar capacity constraints and port congestion continue, expected to persist into Q3 2024.
- Far East to US: Both West Coast and East Coast routes see strong demand, with tight capacity despite added vessels.
- Far East to South America and West Central Asia: Strong demand with limited capacity, especially into India and the Middle East.
- Asia to Australia and New Zealand: Disruptions continue due to congestion at major Asian hubs, reducing total capacity as vessels are diverted to higher-demand routes.
Intra-Asia routes are also facing equipment shortages, particularly out of China. This industry-wide issue has spread from long-haul shipping to intra-Asia routes, adding to supply chain inefficiencies.
At Maersk, we are committed to maintaining schedule reliability and minimizing supply chain impacts. Our Triple Star and Southern Star Services, connecting New Zealand with Greater China and Southeast Asia, continue to achieve above-industry-average performance, with over 80% schedule reliability in June.
