Maersk Says Red Sea Attacks Will Cut Asia-Europe Capacity by a Fifth

The disruption to container shipping traffic in the Red Sea is increasing and is expected to reduce the industry's capacity between the Far East and Europe by some 15%-20% in the second quarter, shipping group Maersk said on Monday.

Maersk and other shipping companies have diverted vessels around Africa's Cape of Good Hope since December to avoid attacks by Iran-aligned Houthi militants in the Red Sea, with the longer voyage times pushing freight rates higher.

Iran-backed Houthi militants have escalated their attacks on shipping lanes in allegiance with Islamist group Hamas, with a particular focus on vessels linked to Israel or its principal allies, the US and Britain. Iranian Supreme Leader Ali Khamenei called on Muslims in September to blockade Israel in response to its invasion of Gaza.The heightened risk has led several shipping companies to avoid the waters.

"The risk zone has expanded, and attacks are reaching further offshore," Maersk said in an updated advisory to customers on Monday.

"This has forced our vessels to lengthen their journey further, resulting in additional time and costs to get your cargo to its destination for the time being," it added.

The Danish company, viewed as a barometer of world trade, last week said that shipping disruptions caused by the Red Sea attacks were expected to last at least until the end of the year.

The knock-on effects included bottlenecks and so-called vessel bunching, where several ships arrive at port at the same time, as well as equipment and capacity shortages.

"We are doing what we can to boost reliability, including sailing faster and adding capacity," Maersk said, adding that it had so far leased more than 125,000 additional containers.

"We have added capacity, where possible, in line with our customers' needs," the company said.

(With reporting by Reuters)