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Red Sea attacks moving further out to sea

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Detour around Africa adds 40% to fuel cost

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Disruption has ripple-effects on other routes

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Sailing faster, leasing more containers

(Adds fuel cost in paragraph 5, Hapag-Lloyd ( HLAGF ) comment in

paragraphs 6-7, effects on other markets in paragraph 9)

By Stine Jacobsen

COPENHAGEN, May 6 (Reuters) - Disruption to Red Sea

container shipping is rising, Maersk said on

Monday, forecasting this will cut the industry's capacity

between Asia and Europe by up to 20% in the second quarter.

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.

"The risk zone has expanded, and attacks are reaching

further offshore," Denmark's Maersk said.

"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 in an

updated advisory to customers.

Maersk's fuel costs on the affected routes between Asia and

Europe are now 40% higher per journey, a spokesperson said.

Germany's Hapag-Lloyd ( HLAGF ), which has said it believes

the crisis can be overcome before the end of 2024, is also

rerouting vessels for the time being.

"The attacks in the Red Sea and the Gulf of Aden are moving

further and further out to sea. That is why we are avoiding this

area altogether," Hapag-Lloyd ( HLAGF ) said in e-mailed comments.

By routing traffic away from the Suez Canal, Maersk

estimated that the container industry's capacity between Asia

and northern Europe and the Mediterranean would be cut by

between 15% and 20% in the second quarter.

COMPLEX

The disruptions cause ripple effects across several other

container freight routes, particularly from Asia to the east and

west coasts of South America, Maersk's spokesperson said, adding

that the Red Sea situation was complex and continued to evolve.

Maersk, viewed as a barometer of world trade, forecast last

week that disruptions would last at least until the end of 2024.

Meanwhile, France's CMA CGM is still sending some vessels

via the Red Sea escorted by French or other European navy

frigates, but the majority of its ships are being rerouted

around Africa, CEO and Chair Rodolphe Saade told Le Monde.

"The problem is that you have to call at ports that are not

the final destination and to transship onto smaller vessels,"

Saade told the newspaper in an interview published on Monday.

"Tangiers is saturated and alternatives need to be found -

like (Spain's) Algeciras or Valencia," he added.

The knock-on effects of voyages around Africa include

bottlenecks and 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.