Hapag-Lloyd has shelved plans to reinstate a Suez Canal routing for its India–US East Coast “TPI” service after failing to secure sufficient customer support, largely due to persistent concerns over cargo insurance and risk exposure, according to industry sources.
According to market participants, including sources within Hapag-Lloyd India, the resistance was led primarily by Expeditors International, understood to be the German carrier’s largest freight forwarder customer on the India–US trade. The US-based forwarder reportedly flagged continued uncertainty surrounding war risk and insurance premium implications associated with transiting the Suez Canal, despite the carrier’s efforts to canvass customer feedback on a possible return to the route.
Expeditors was unable to convince many of its core shipper clients to accept the potential cost and liability exposure linked to a Suez routing, sources said. Shippers remain wary of unpredictable insurance surcharges, voyage disruptions and operational risks tied to the Red Sea region, even as some carriers explore a gradual resumption of Suez transits.
As a result, Hapag-Lloyd has opted to maintain the TPI service on its existing Cape of Good Hope routing, which, while longer in transit time, is viewed by customers as offering greater cost predictability and lower risk. The decision underscores the continued reluctance among cargo owners to return to the Suez Canal unless there is clearer stability and a sustained reduction in security-related premiums.
Industry executives noted that while carriers are keen to shorten sailing times and reduce fuel costs by returning to Suez, customer acceptance remains a critical hurdle. For many shippers on the India–US East Coast trade, the benefits of faster transit are currently outweighed by concerns over insurance costs, supply chain reliability and potential last-minute diversions.
Hapag-Lloyd has not made any public commitment on when it might again reconsider a Suez routing for the TPI service, with sources indicating that any future move would depend on a marked improvement in regional security conditions and a corresponding normalization of insurance markets.
The development highlights a broader trend across liner shipping, where customer sentiment—particularly from large forwarders and beneficial cargo owners—is playing a decisive role in routing decisions as the industry navigates ongoing geopolitical uncertainty around the Red Sea and Suez Canal corridor.
