Middle East Crisis: Maersk Warns of Urgent Demand for Food Imports Amid Hormuz Blockade

Photo: Maersk

On Wednesday, the Chairman of the Board of Danish container shipping group A.P. Moller-Maersk warned that the Middle East is facing an "urgent need" for imported food - a supply chain severely disrupted by the outbreak of hostilities in the Gulf.

The severity of the issue is underscored by data from the World Economic Forum (WEF). Accordingly, Gulf Cooperation Council (GCC) countries - including Saudi Arabia, Qatar, and the United Arab Emirates (UAE) - currently import up to 85% of their consumed food.

The conflict, stemming from US-Israeli airstrikes on Iran last month, followed by Iran's retaliatory attacks and the move to blockade the Strait of Hormuz, has brought maritime activity in the Gulf to a near standstill. This situation is sending shockwaves across global supply chains.

Response Strategies from Maersk and Other Carriers

In response to the crisis, Maersk has been forced to temporarily suspend cargo bookings to several ports in the Gulf region, while simultaneously implementing a global Emergency Fuel Surcharge to offset escalating bunker costs.

According to Robert Maersk Uggla, Chairman of Maersk, the group currently has over 6,000 employees in the region, playing a vital role in providing essential transport and logistics services to local customers and communities. Speaking at the company's annual general meeting, he emphasized: "This includes a pressing need for the import of food, often using cold chain solutions such as Maersk's reefer containers, a segment where we are the market leader in the region,"

To maintain the flow of goods amidst the blockade of critical infrastructure, the Maersk Chairman added: "As the Strait of Hormuz is closed for now we try to find other ways to bring the cargo into the gulf."

In a related development, ocean carrier Hapag-Lloyd stated on Wednesday morning that it is incurring massive additional costs, ranging from $40 million to $50 million per week, due to the crisis in Iran. The primary causes stem from surging bunker fuel prices, skyrocketing insurance premiums, and container storage and demurrage charges.

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Source: Phaata.com (According to Baird Maritime)

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