News / Gemini warns of 'meltdown' when Suez reopens

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Maersk has warned of an “operational meltdown” when carriers are able to use the Suez Canal again.

The Danish liner, along with Hapag-Lloyd, announced their hub-and-spoke Gemini Cooperation services would go round the Cape of Good Hope instead of the still-volatile Red Sea. 

Maersk told customers yesterday: “After thorough consideration, and given the continued safety concerns in the Red Sea, Hapag-Lloyd and Maersk confirm they expect to phase-in their Cape of Good Hope network for the commencement of the Gemini Cooperation on 1 February 2025.” 

Maersk CCO Karsten Kildahl told reporters at the UK port of Felixstowe yesterday the reason for the decision, some four months before Gemini launches, “is to enable customers to do their operational planning”.  

He explained: “They need to know what their lead times are, when they’re planning when they can have their things in the store… We want to give them as much opportunity [as possible] to plan their operations.” 

Hapag-Lloyd told The Loadstar it would plan for “an orderly transition [to Suez Canal transits] to be executed as fast as circumstances allow”, but added that “many currently unknown factors” made it impossible to predict exactly when.  

Mr Kildahl said: “You cannot just flip-flop. What we’ve seen in the past is that it looked safe, people tried to go through, but it wasn’t safe and you undo it.  

“One of the things our customers keep telling us is that they need stability and predictability of their flows to be able to plan their business. It’s not in their interest to suddenly have their cargo arrive,” he said.  

And Mr Karsten added: “The moment the canal opens, the havoc is going to start, because you will have [many] vessels coming in at the same time. 

“Vessels that left Asia two weeks earlier will clash with vessels that leave Asia. So, if you think it was a nightmare operation when the canal closed, it’s nothing compared to what it’s going to look like when it opens again. 

“At that point, we will have several weeks, I would even say a couple of months, when you have something that will look like an operational meltdown. And we don’t take this lightly,” he added. 

The Gemini carriers are targeting a schedule reliability of above 90%, once fully phased-in, and Hapag-Lloyd told The Loadstar that “remains unchanged”.  

“Our Cape of Good Hope network follows the same design principles as our Suez network and will not compromise the reliability or efficiency of our services. We’ve ensured that our services will remain flexible, efficient and resilient, despite the disruptions in the Red Sea region,” a spokesperson said. 

Its Cape network will include 29 mainliner services, supported by 28 intra-regional shuttle services, operated by a fleet of around 340 vessels with a total capacity of 3.7m teu. 

If the services had been able to use the Suez Canal, the network would comprise 27 ocean mainliner services with 300 vessels.  

However, last month Maersk told customers mainline services would be supported by 30 intra-regional shuttle services – two more than was announced yesterday. A spokesperson told The Loadstar the change was in the European shuttle network.

“Two shuttles in the Nordics were merged into one and another was extended to Italy, therefore making another one obsolete.”