Maritime experts and shipping industry insiders are not expecting a return of ocean carriers to the Red Sea anytime soon, despite the Israel-Hamas ceasefire deal.
“This is all still very early days,” said Alan Murphy, founder and CEO of Sea-Intelligence. “The Houthis in Yemen have justified their attacks on international shipping as a response to the Israel-Hamas war, but there are no guarantees that the recent Israel-Hamas ceasefire will be a lasting one, or that this will lead to an end to the conflict in Gaza,” he added.
It’s been 690 days since the Houthis rebels launched their attacks on vessels navigating the Red Sea and they have not agreed to a ceasefire.
Lars Jensen of Vespucci Maritime noted in a LinkedIn post that “Despite the ceasefire between Israel and Hamas, the Houthis will for now not start a ceasefire. The Houthi leader Abdul-Malik al-Houthi stated that targeting Israeli maritime routes will continue until, as he said, “[…] the aggression against Gaza stops and the unjust siege is completely lifted.”
Murphy said the Houthis may not view the ceasefire as meeting their demands, and they “could very well make the demand for outright Palestinian statehood a condition to stop the attacks, a challenging proposition,” he added.
He said there are a lot of puzzle pieces that will need to fall into place before the global shipping lines can justify putting their crews at risk by transiting the Red Sea, despite the fact that it saves transit time and cost.
“These are geopolitical puzzle pieces and thus outside of the control of shipping lines,” Murphy said. “The lines are likely to require very firm commitments from the Houthis of no further attacks, as well as increased security support from Western forces, before they will even consider a return to the Suez, and both can be hard to come by,” he explained.
In addition, ocean carrier shipping networks are very complex and “heavy beasts,” in Murphy’s words, to move around.
For example, moving a single weekly service back to a Suez Canal routing involves 14 vessels on a 98-day round trip, of which 12 would be routed back to Suez and the last two vessels would be taken out of the service, Murphy explained. “These are operations that take several months to implement, and not a decision taken lightly, especially if there is a real risk of having to reverse course, and go back to round-Africa, if attacks return to the Red Sea,” he said.
Then, once the ocean carriers decide to traverse the Red Sea again, congestion at the ports is expected to occur because the vessels taking the shorter route through the Red Sea and Suez would be arriving at the ports in Europe and Asia at the same time of vessels that traveled around the Horn of Africa.
When conditions allow for the resumption of Red Sea transits, he said it would make the most sense for the three major global freight liner alliances (the Premier Alliance, Ocean Alliance, and Gemini), and the world’s biggest ocean shipping company, MSC, to return to a Suez routing in separate stages. “Then, this could potentially be manageable, but given the high-stakes game of prisoner’s dilemma, we are likely to see them all rush back to Suez in similar time frames,” Murphy said.
In a worst-case scenario, the congestion could last for several months, and as port congestion builds up and everything slows to a crawl, lead to vessels stuck outside port, driving disruptions and blank (canceled) sailings. “If we see a somewhat simultaneous shift to Suez across the three alliances and MSC, then we are likely to see congestion and disruptions for at least 2-3 months, but could be up to 4-6 months,” Murphy predicted.
The port congestion would create an artificial shortage of vessels because they would not be available to be loaded with additional goods.
“We are likely to see a spill-over to all deep-sea trades,” Murphy added.
That situation would also lead ocean freight rates to go up, as they have historically done in the past, with spot rate increases as much as three to five times over long-term averages, according to Murphy.
Ultimately, Murphy said the extra vessels that were added to the vessel line up to accommodate the longer-transits around Africa should drive ocean freight rates down because too many ships will be available compared to demand.
Overcapacity of ships could drive freight rates down to 2023 levels or below, Murphy said, and he added the earliest he would expect to see an easing in the oversupply of vessels would be around 2028 at the earliest.
As far as an initial return to the Red Sea, he thinks a reasonable forecast would be coinciding with the Chinese New Year of Golden Week. But he added, “I think it would be far too optimistic to assume this could all work out in time for Chinese New Year 2026. Maybe Golden Week in October 2026.”
Murphy said the first ocean carrier alliance (or possibly MSC) to return to the Suez routing would have a massive cost advantage, compared to those who continue to go around Africa, because of the faster transit and use of less fuel.
“The lines most eager to return to a Suez routing are likely to be MSC, CMA CGM, and ZIM, due to their strong market positions in the Eastern Mediterranean, a market devastated by the closure of the Suez routing,” he said.
