Yemen’s Houthis have signalled a halt to their attacks on Israel and commercial ships in the Red Sea following the ceasefire in Gaza, although the risk to shipping remains.
While confirming a pause for now, an immediate largescale return to the region will require a series of further assurances, analysts warn.
Traffic has inched up recently in the lull in attacks, but many shippers continue to go around Africa via the Cape of Good Hope to avoid the Red Sea and the Gulf of Aden.
Peter Sand, chief analyst at the ocean and air freight intelligence platform Xeneta, said: “Details are sketchy and you cannot base the safety of crews, ships and cargo on the word of Houthi militia. Carriers need far more assurance than that and, perhaps more importantly, so do insurance companies.
“Different carriers have different tolerances to risk and we have seen some intermittently testing the water, with the CMA CGM Zheng He and CMA CGM Benjamin Franklin making voyages through the region in November, but generally the number of container ships transiting the Suez Canal has been trending downwards during 2025.
“Transits may start to increase if there is a perceived lower risk, but we are unlikely to see an imminent return to 2023 levels.”
The Suez Canal Authority announced recently the gradual return of mega container ships to the canal in the past two years, marked by the transit of the container ship CMA CGM Benjamin Franklin.
The voyage marks the first transit of the giant container ship through the Suez Canal and Bab el-Mandeb Strait since its last transit on October 22, 2023, due to regional tensions.
According to admiral Ossama Rabiee, chairman and managing director of the Suez Canal Authority, the transit of the container ship through the Suez Canal and then Bab el-Mandeb Strait is a positive indicator of the return of giant container ships to the Canal.
Egypt’s Suez Canal Authority chairman and managing director met recently with Denmark’s Ambassador to Egypt, Lars Bo Møller, and a Danish delegation in Ismailia to discuss future cooperation in the maritime sector.
Rabiee urged Maersk to take the initiative to gradually resume transiting the Suez Canal, citing the canal’s longstanding partnership with Maersk.
However, Denmark’s Ambassador to Egypt, Lars Bo Møller, noted that Maersk is carefully monitoring security and navigational conditions in the Red Sea and will fully resume regular transits once circumstances permit.
Longer sailing distances around the Cape of Good Hope in Africa due to the threat of Houthi attacks in the Red Sea region is currently absorbing around 2 million TEU (20ft equivalent container units) of global container shipping capacity and increasing the transport demands on the fleet.
A largescale return to the Red Sea would therefore reduce the transport work required of the fleet and potentially cause freight rates to plummet – unless carriers take drastic measures, such as idling, demolition, slow-steaming and widespread blank sailings.
Peter Sand said: “Average spot rates from Far East to North Europe, Mediterranean and US East Coast – three trades that would ordinarily transit the Red Sea – are all down more than 50% since the start of year. A largescale return of container ships to the Red Sea would flood the market with capacity and cause freight rates to plunge even lower across trades at a global level, not just those directly impacted by the diversions.
“Carriers are already heading into loss-making territory and freight rates are expected to fall up to -25% globally in 2026, even with no change to the situation in the Red Sea.
“Shippers should also be making contingency plans because a largescale return would cause severe disruption across global ocean supply chains as services transiting Suez Canal are reinstated.
“There are still many questions to be answered, but the impact of a largescale return would be seismic for shippers and carriers,” Xeneta’s chief analyst warned.
