A month in, costly global shipping disruptions may soon end after Houthi rebels in Yemen signaled they had suspended their attacks on merchant ships in the Red Sea.
But it may take some time to get back to normal. Shipping lines say they will only return to the Red Sea when they are sure their vessels will not be attacked. This could take time as the Houthis have vowed to renew their attacks if Israel’s airstrikes are closed or if the Houthis are targeted by Israel or the US and its allies.
Some analysts say that even if freighters return to the Red Sea, the waterway between the Indian Ocean and the Suez Canal, it may take time for shipping companies to fully revive their operations.
Houthi attacks on shipping began in late 2023, shortly after the war between Hamas and Israel began. The Houthis announced late last week that the group would stop its attacks.
To avoid Houthi drones and missiles, shipping companies have mostly stopped passing through the Red Sea and the Suez Canal. Instead, ships sailed around the southern tip of Africa to reach Europe from Asia. The route is 3,500 nautical miles and 10 days longer than via Suez, which increases shipping costs exponentially.
“The situation in the Suez Canal is fluid and the security situation is unclear,” MSC, a major Swiss shipping company, said in a statement.
Maersk, a major Danish shipping company, said it would begin sailing through the Red Sea when it was safe to do so. “It is too early to speculate on timing, but this development is a necessary step in the right direction,” the company said in an email.
Analysts said such caution was understandable.
“They don’t want to go through the process of converting all their services to Suez, only to have it prove insecure, then have to change everything.” .
Vessel diversions have been one of the biggest fluctuations in shipping in recent times. Before the Houthi attacks, the Suez Canal handled 10 percent of global trade and more than a fifth of container shipments, according to the United Nations.
The Houthis carried out some 130 attacks on merchant ships. According to the location and event statistics of armed conflictsa crisis monitoring organization.
Some merchant ships continued to use the Red Sea, but most stayed away. A French logistics company, CMACGM, shipped most of its ships around the Cape of Good Hope in Africa, but the company operated a weekly service through the Red Sea and the Suez Canal. As a result, analysts said, CMACGM could potentially be the first container line to return.
“CMACGM is closely monitoring ongoing developments in the region and looks forward to a return to stability and safety for all,” the company said in a statement.
Because it took longer to get around Africa, shipping lines added more vessels and trips so, after the initial adjustment, customers still got their goods on time. Fortunately, companies ordered several new ships in 2021 and 2022, when they were flush with profits from the pandemic trade boom. With considerable demand for these new vessels, shipping rates increased.
Now, shipping companies can handle more vessels because each one can complete the journey faster. This can push freight rates down. According to Fretos, a digital marketplace for shipping, the average cost of shipping a container is down 30 percent from last year’s high, but it’s still about 200 percent higher than before the attacks began.
Some analysts say there could be a logjam of ships in some places as companies move ships on shorter routes.
“You’re taking a lot of ships out to sea at the same time,” said Salvatore Mercagliano, a maritime historian and an associate professor at Campbell University in North Carolina. “And they would come in a lot and anchor and sit there, so what you would start to see is some congestion in the harbors.”
But others said the industry would be fine.
Mr Miller of Lloyd’s List said: “With the return to the Suez route, shipping lines have already had time to plan for the transition, so any transitional disruptions should theoretically be more limited and manageable. should.”
More ships passing through the Suez Canal will provide welcome relief to businesses that have complained of five years of delays and increased shipping rates. In addition to the Houthi attacks, shipping has been affected by the pandemic, reduced crossings at the Panama Canal and labor unrest at ports on the US East and Gulf coasts.
Another challenge may be forthcoming. Mr Mercagliano said President Trump’s threat of tariffs could prompt US businesses to order more foreign parts and goods ahead of the new duties, clogging ports with containers and keeping shipping rates high. “There’s a lot in flux right now,” he said.
