Navigating the Red Sea & Suez Canal: Latest Developments

Date Added: 24 January 2025

Red Sea and Suez Canal Update 

Houthi rebels have agreed to end attacks in the Red Sea
As a result of the ceasefire agreement between Israel and Hamas which commenced on 19th January, Houthi rebels have issued a statement declaring the end of attacks on non-Israeli commercial ships transiting through the Red Sea. Media reports suggest that the cessation of targeting Israeli ships will occur once all phases of the ceasefire agreement are fully implemented.

When will commercial ships start using the Suez Canal again?
Shipping companies are not expected to resume using the Suez Canal anytime soon. It is understood that it will be months rather than weeks. They will proceed with caution to ensure the ceasefire and Houthi statement are upheld.
In addition, carriers will require time to redesign their operational structures and consider concerns such as overcapacity, equipment imbalance, port congestion, and rate stability.

Market impact
The return of carriers transiting the Red Sea/Suez Canal will result in a significant reduction in transit times. This, in turn, will disrupt market conditions by creating overcapacity due to fewer vessels being needed for the East/West routes. Historically, overcapacity has caused rates to plummet. As a result, we are already seeing rates fall in anticipation of the return to normal transit.
February 1st sees the new container shipping alliances come into effect, with carriers beginning to shift their vessels into their new service networks, which coincides with the seasonal demand slump after Chinese New Year. Vespucci Maritime said that rather than the usual  large amount of blank sailings seen after Chinese New Year, prioritisation of the phase-in of new ships into the new networks, rather than managing blank sailings effectively, may cause some short-term overcapacity problems in early February which could also lead to temporary rapid drops in spot rates.

We will keep you updated!
Our team is dedicated to ensuring that you are always informed with the latest updates and news regarding ocean freight market conditions that may affect your supply chains. We understand the importance of clear communication and transparency, which is why we promise to keep you up-to-date on any changes or developments that may affect you. Our goal is to provide you with the best possible experience, and that starts with keeping you informed every nautical mile of the voyage.
 

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