Maersk rules out return to Suez Canal soon due to Houthi threats in Red Sea

Danish shipping group A.P. Moller-Maersk said on Thursday it expects strong demand for cargo shipping around the world to continue in the coming months, although it does not expect sailings through the Suez Canal to resume until 2025.

Attacks on ships in the Red Sea by Iran-allied Houthi militants have disrupted a vital shipping route for east-west trade, with long-term reroutings driving up freight rates and causing congestion at Asian and European ports.

“There are no signs of de-escalation, it is not safe for our ships or our personnel to go there,” Chief Executive Vincent Clerc told reporters. “We expect at this stage that this will continue into 2025.”

Maersk, a barometer of global trade, said in January it would divert all container ships from the Red Sea route to Africa’s Cape of Good Hope for the foreseeable future. The company said on Thursday it saw strong demand in the third quarter, driven in particular by exports from China and Southeast Asia.

Clerc said he saw no signs of a slowdown in shipping volumes from Europe or North America in the coming months.

Maersk also confirmed strong preliminary third-quarter earnings, released on Oct. 21, driven by higher freight rates, and raised its full-year outlook, citing strong demand and continued disruption to shipping in the Red Sea. Maersk shares were up 2.4 percent by 0957 GMT.

“Container trade remained strong in the third quarter. Demand is estimated to have grown by 4 to 6 percent year-on-year. Exports from China and Southeast Asia account for a very large part of this growth,” the Danish company said in a statement.

The company added: "China's economy continues to suffer from excess manufacturing capacity and reliance on export-led growth, while domestic demand and consumer confidence remain weak."

Source: Agencies