Maersk warns real work to clear Suez backlog has only just begun

Maersk has warned that customers should not expect a quick return to normal services after the Suez Canal blockage, which the world’s largest shipping company predicts will keep disrupting global supply chains in the coming weeks.

Lars Mikael Jensen, head of global ocean network at Maersk, told the Financial Times that people had been lulled into thinking that international shipping was functioning smoothly once again because the backlog of ships at the vital trade route has been cleared.

“It’s not the case. Only afterwards the work really starts,” he said, referring to negotiations for berthing slots at ports and delayed ships missing their next scheduled voyage. “The backlog arrives either to Europe or Asia around the same time and you get the congestion.”

Jensen said that the knock-on effects on global supply chains were far from over. “We will see ripple effects continuing into the second half of May,” he said.

The Suez Canal was blocked for six days at the end of last month after the Ever Given, a ship the length of four football pitches, ran aground and held up more than 400 ships at one of the world’s most important trade arteries. It took about a week for the queue of ships to pass through the canal.

The warning from Maersk follows cautious messaging from ship operators about potential disruption and acknowledgment by European manufacturers that supply chains would likely be hit as a result.

Maersk has reopened short-term cargo bookings from Asia after suspending them in the wake of the crisis. But it has asked customers to only send urgent goods and is dropping off cargo at one port to be sent on to others, so vessels can avoid the more northerly harbours in Europe and Asia to get back on track after delays.

Container terminals are stretched for space to store the boxes coming off the ships with German shipping liner Hapag-Lloyd saying the situation in northern Europe is “critical”, particularly at large ports such as Rotterdam and Southampton. Some port authorities have started demanding shipping companies take a certain number of containers onboard if they want to anchor and offload their cargo, Jensen said.

The Maersk veteran stressed that disentangling the disruption stemming from Covid-19, with whipsawing demand for goods already sending finely tuned shipping networks into disarray, from the Suez Canal disruption was extremely difficult.

But he added that the blockage, together with a fresh wave of the virus in some countries, would push back a return to calmer operations.

“The best bet is we will see a normalisation in Europe around the second quarter — towards the back end of the quarter because of the Suez,” he said, with the US to follow later.

Rolf Habben Jansen, chief executive of Hapag-Lloyd, was more pessimistic, saying on Thursday that a return to normal in both markets is not expected until the third quarter.