Maersk CEO: Shipping disruption in the Red Sea may last “at least a few months”

Maersk CEO Vincent Clerc said on Wednesday that disruption to global shipping traffic as a result of attacks on ships in the Red Sea may last at least a few months.

According to Reuters, Maersk and other large shipping companies issued instructions to hundreds of commercial ships to stay away from the Red Sea, and sent the ships to sail through the longer Cape of Good Hope route after attacks launched by Iran-aligned Houthi militants on ships.

“For us, this means longer transit times and possibly disruptions in the supply chain for at least a few months,” Clerk added at a global markets forum in Davos. “We hope for a shorter period than that, but it may also be longer because it is not possible to predict how this situation will actually develop.”

Shipping rates have more than doubled since early December, according to the global container index of maritime consultancy Drewry, and insurance company sources said that insurance premiums for war-risk passage of shipments through the Red Sea are rising.

Bank executives expressed concern that the crisis may result in inflationary pressures, which could ultimately lead to a delay in interest rate cuts or rises.

“This is very disturbing because approximately 20% of global trade passes through the Bab al-Mandab Strait, which is one of the most important arteries of global trade and supply chains, and is currently blocked,” Clerk said.