Global shipping giant Maersk will pass increased transport costs stemming from disruptions in the Middle East directly to consumers, according to a statement made by the company’s chief executive, Vincent Clerc. The move comes as the conflict involving Iran continues to severely impact key trade routes and drive up fuel prices.
“We have traditional contractual mechanisms that pass this fluctuation in fuel price, whether it goes up or down, to customers,” Clerc told the BBC in an interview. “So, in this case, these increases will pass to our customers and, to the consumers.”
The conflict has brought transportation through the Strait of Hormuz, a critical waterway for global oil supplies, to a near standstill. Before the hostilities, approximately 20% of the world’s oil passed through the strait, according to Maersk. Simultaneously, major shipping lines are diverting vessels around the Cape of Good Hope to avoid security threats in the Red Sea, adding significant time and expense to voyages.
The increased costs are already being felt. China’s transport ministry has reportedly convened meetings with executives from Maersk and other shipping firms to discuss rising freight rates, with costs increasing by approximately $200 per standard 20-foot container, representing a 15% to 20% increase, Clerc stated.
Maersk, a Danish company and the world’s second-largest shipping line, relies heavily on its container shipping division, which transports goods such as toys, clothing and electronics worldwide. The disruptions are causing widespread economic challenges, with firms facing delays and increased expenses.
Clerc called for a diplomatic resolution to restore stability to the region, suggesting that a “deal” between the U.S., Israel, and Iran to ensure freedom of navigation would be preferable to relying on naval escorts. “we need to get back to a situation where freedom of navigation and peaceful navigation are restored,” he said.
The situation is further complicated by security concerns. At least seven sailors have been killed in the Strait of Hormuz since the start of the conflict, according to the International Maritime Organization (IMO). IMO Secretary-General Arsenio Dominguez stated that these mariners were “simply performing their duties and providing an essential service to the global community” and deserve protection.
Iran has justified the disruption to shipping, with government spokesperson Fatemeh Mohajerani stating the country needs to maximize “all resources” while in a state of war.
While some shipping companies, including Maersk, had begun a gradual return to the Red Sea route in recent weeks following threats from the Houthi group, the current tensions in the region continue to pose significant risks. As of Monday, data from KN Seaexplorer indicated that 132 ships remained stalled in the Gulf, though the exact number is difficult to confirm as some vessels have reportedly switched off their transponders to conceal their locations.
Clerc emphasized the paramount importance of crew safety, stating that the threat of drone attacks makes it difficult to risk personnel and vessels without a guaranteed armistice. He acknowledged that while land-based transport is being utilized to mitigate some disruptions, it cannot fully compensate for the volume of goods typically moved by sea, potentially leading to shortages of certain products, such as petrochemicals.
