Houthi militia have reportedly ceased attacks on Israel and Red Sea shipping — a development that could have major implications for global container trade.
However, analysts caution that a large-scale return of vessels to the region will depend on more than just statements of intent.
Peter Sand, Chief Analyst at Xeneta, said the situation remains uncertain. “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.”
According to Sand, carriers have shown varying levels of risk tolerance. Some, including the CMA CGM Zheng He and CMA CGM Benjamin Franklin, have already transited the region in November.
READ: Panama Canal, FIU partner to advance trade
Yet overall, the number of containerships passing through the Suez Canal has continued to decline through 2025.
He added: “Transits may start to increase if there is a perceived lower risk,” he added, “but we are unlikely to see an imminent return to 2023 levels.”
Longer routes around the Cape of Good Hope, adopted in response to Red Sea security threats, are currently absorbing around 2 million TEUs of global container shipping capacity.
This additional distance has tightened available supply and increased overall transport demand.
A widespread return to the Red Sea would ease those pressures but could also trigger sharp rate declines unless carriers implement mitigating measures such as idling, demolition, slow-steaming, or widespread blank sailings.
READ: Far East freight rates skyrocket amid capacity crunch
Sand explained: “Average spot rates from the Far East to North Europe, the Mediterranean, and the US East Coast – three trades that would ordinarily transit the Red Sea – have fallen by more than 40 per cent since the start of the year. A large-scale return of container ships would flood the market with capacity and cause freight rates to plunge even further, not just in affected routes but globally.”
Carriers are already close to loss-making territory, with freight rates forecast to drop by as much as 25 per cent in 2026 even if the Red Sea situation remains unchanged.
Sand warned that a sudden resumption of Suez Canal transits could also cause significant short-term disruption as global service networks readjust.
He said: “Shippers should be making contingency plans. The impact of a large-scale return would be seismic for both shippers and carriers.”
A pause in Houthi attacks is welcome, but trust takes time. As Peter Sand notes, shifting risk and capacity could shake the market as much as the crisis itself. The industry’s real test now is readiness — not just for disruption, but for recovery.
For more information:
Xeneta – http://www.xeneta.com/
