Robert Maersk Uggla, chair of the board at A.P. Moller-Maersk, told shareholders on Wednesday that the Middle East is contending with an acute dependence on food imports that has been disrupted by the recent Gulf conflict.
Uggla cited figures from the World Economic Forum showing that Gulf Cooperation Council countries - including Saudi Arabia, Qatar and the United Arab Emirates - import as much as 85% of their food. He highlighted the importance of cold chain logistics in that flow, noting Maersk's role in the market for refrigerated "reefer" containers in the region.
"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," Uggla said at the Danish shipping group's annual general meeting.
The company is now operating in an environment where the Strait of Hormuz is closed. Uggla said Maersk is working to identify alternative shipping routes to maintain deliveries into the Gulf, but he did not provide further details on those contingency plans.
The disruption followed a round of military action that the article describes as starting with U.S.-Israeli strikes on Iran last month. Iran's response included attacks across the region and the closure of the Strait of Hormuz, a move that has brought shipping in the Gulf to a near standstill and created disruptions across global supply chains.
In response to the rapid deterioration of maritime operations in the area, Maersk temporarily suspended cargo bookings to multiple ports in the Gulf and put in place emergency bunker fuel surcharges worldwide to help offset the impact of rising fuel costs.
Summary of the situation
The Gulf's heavy reliance on imported food moved mainly by refrigerated containers has been exposed by the recent conflict. With a key maritime chokepoint closed and regional attacks ongoing, Maersk is adjusting operations - including suspending bookings and adding fuel surcharges - while seeking alternate routes to deliver essential cargoes into the Gulf.