The ceasefire declared on May 6th between the US and Houthi rebels has sparked optimism for the potential reopening of the Red Sea trade route. However, shipping experts warn that a swift return of container vessels to the Suez Canal remains unlikely.
Currently, most carriers are diverting ships via the Cape of Good Hope, a detour that requires two to three additional vessels per loop to account for longer transit times. A rapid shift back to the Suez Canal would suddenly release this extra capacity into the market, risking an oversupply and a sharp drop in freight rates—an outcome carriers are eager to prevent.
The backdrop is already challenging, with global demand dampened by tariff-related economic pressures. Industry players are therefore hesitant to disrupt fragile rate stability with premature redeployments.
Resuming Red Sea operations would also demand significant operational shifts and fleet restructuring. Many carriers view this as too risky given the current situation, noting that the ceasefire is fragile and maritime security remains uncertain. In fact, recent reports indicate Houthi forces are attempting to enforce a naval blockade on Israel’s port of Haifa, underscoring ongoing regional instability.
Meanwhile, the Suez Canal Authority, which has suffered major revenue losses during the crisis, is incentivising a return. A 15% toll rebate for vessels over 130,000 net tonnes is now in place.
Despite the ceasefire, many industry experts caution that a full-scale return to the Red Sea corridor may be months away, and not likely to occur before 2026.