TG4 TV PC to TV
Container shipping giant Maersk is diverting all vessels from Red Sea routes around Africa’s Cape of Good Hope for the foreseeable future, it said today, warning customers to prepare for significant disruption.
Shippers across the world are switching away from the Red Sea – and so the shortest route from Asia to Europe via the Suez Canal – after Iranian-backed Houthi militants in Yemen stepped up attacks on vessels in the Gulf region to show their support for Palestinian Islamist group Hamas fighting Israel in Gaza.
The trip round Africa can add about 10 days to journey times and requires more fuel and crew-time, jacking up shipping costs.
Denmark’s Maersk had said earlier this week it would pause all vessels bound for the Red Sea following an attack on one of its ships by Houthi militants, and has since begun redirecting ships around Africa.
“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,” Maersk said in a statement today.
As a result, the company will divert all Maersk vessels around the Cape of Good Hope “for the foreseeable future”.
The United States on December 19 launched a multinational operation to try to safeguard commerce in the Red Sea, but many shipping companies and cargo owners are still diverting vessels around Africa due to continued attacks.
Maersk yesterday rerouted four out of five southbound container vessels that had already passed through the Suez Canal back north for the long journey around Africa.
“While we continue to hope for a sustainable resolution in the near future and do all we can to contribute towards it, we do encourage customers to prepare for complications in the area to persist and for there to be significant disruption to the global network,” Maersk said.
The Suez Canal is used by roughly one-third of global container ship cargo, and re-directing ships around the southern tip of Africa is expected to cost up to $1m extra in fuel for every round trip between Asia and Northern Europe.
Meanwhile, French shipping firm CMA said today it had not changed plans announced last month to gradually raise the number of vessels transiting through the Suez Canal.
“There is no change on our side,” CMA CGM said today.
Yesterday the boss of clothing retailer Next said that its sales growth will likely be moderated if disruption to shipments through the Suez Canal due to attacks by Iran-backed Yemeni Houthi militants in the Red Sea continues through 2024.
Next CEO Simon Wolfson said the issue, if it persists, will result in a delay of stock arriving in the UK of around two and a half weeks as shipments are diverted around Africa’s southern Cape of Good Hope.
He said Next, which sources the majority of its products from Asia, could mitigate this through earlier ordering or using some air freight.
“It will be a factor if it continues, it will moderate sales growth in that we’ll have slightly less stock in the country than we would like,” Wolfson told Reuters after the retailer updated on Christmas trading which drove its shares up 5%.
Next is one of the first major retailers to comment on the disruption after Inter IKEA in December warned of potential product shortages.
Wolfson, however, said the issue needed to be put in the context of Next’s supply chains.
“If I look at the amount of stock we’ve got today, it’s probably about 15 to 17 times the amount of stock that we sell in a week,” he said. “So if two weeks of that is late, it means your stock levels are not optimal but it’s not like you’ve got nothing on the shelves.”
He said consumers would notice in that some of the best selling lines might run out and some sizes they were hoping to find might not be available.
Wolfson said Next has made an allowance in its financial guidance for the 2024/25 year for higher sea freight costs.
Despite that, Next does not expect to raise selling prices for consumers for the spring/summer season.
Source link
