Houthi militia have reportedly ceased attacks on Israel and Red Sea shipping, a move that could have seismic implications for global container trade.
However, analysts caution that a large-scale return to the region will depend on further assurances.
Peter Sand, Chief Analyst at Xeneta – the ocean and air freight intelligence platform – 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.”
Longer sailing distances around the Cape of Good Hope in Africa due to the threat of Houthi attacks in the Red Sea region are currently absorbing around 2 million TEUs of global container shipping capacity and increasing the transport demands on the fleet.
A large-scale 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.
Sand said: “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 – are all down more than 50 per cent since the start of the year.
“A large-scale 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 per cent globally in 2026, even with no change to the situation in the Red Sea,” continued Sand.
“Shippers should also be making contingency plans because a large-scale return would cause severe disruption across global ocean supply chains as services transiting the Suez Canal are reinstated.
“There are still many questions to be answered, but the impact of a large-scale return would be seismic for shippers and carriers.”
Earlier this summer, Red Sea Gateway Terminal (RSGT), in collaboration with the Saudi Ports Authority (Mawani), announced a strategic expansion into multi-purpose terminal operations, through newly awarded concessions at four existing strategic port facilities along the Red Sea.
