
21 Jan Carriers Remain Cautious About Red Sea Return Despite Ceasefire Progress
Despite recent ceasefire developments between Israel and Hamas, global shipping lines are unlikely to rush back to using the Suez Canal for container transits, citing safety concerns and market unpredictability.
Key Developments:
- Ceasefire Agreement:
On Sunday, a ceasefire agreement between Israel and Hamas included a statement from the Houthis, indicating they would cease attacks on vessels in the Red Sea, except those owned by Israeli companies or flying Israeli flags. - Carrier Caution:
Analysts like Drewry and Xeneta caution that a full return to Red Sea operations will take time. Shipping lines remain wary of the region’s volatility, requiring assurance that the ceasefire will lead to long-term stability.- Drewry: “Carriers will need to be utterly convinced that the threat of attack has been eliminated.”
- Xeneta: “Carriers will likely take months rather than weeks to resume operations.”
- Ad Hoc Transits:
While reports suggested CMA CGM might resume Red Sea transits for its EPIC service, the carrier clarified that the CMA CGM Columba’s Suez Canal transit to Jeddah is a one-off call. Systematic Red Sea transits remain off the table.
Barriers to a Full Return:
- Operational Complexity:
Matthew Gore of law firm HFW noted that re-routing container shipping involves significant logistical challenges and fixed schedules, particularly as alliances phase in new east-west networks. - Overcapacity and Market Volatility:
Drewry highlighted overcapacity concerns and a volatile demand landscape, further complicating the decision to resume Suez transits. The return of Donald Trump as US president and potential new tariffs add another layer of uncertainty. - Tankers and Bulk Carriers as First Movers:
Experts suggest that tankers and bulk carriers may test the waters first before container shipping lines follow suit.
Outlook:
Carriers are expected to monitor the situation closely and prioritize safety and operational stability before committing to Red Sea transits on a large scale. For now, container shipping will rely on alternative routes, maintaining a cautious approach to avoid potential disruptions.