Maritime experts and shipping industry experts do not expect a return of ocean carriers to the Red Sea anytime soon, despite the ceasefire agreement between Israel and Hamas.
“This is all still very early,” 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 war between Israel and Hamas, but there are no guarantees that the recent ceasefire between Israel and Hamas will last or lead to an end to the conflict in Gaza,” he added.
It has been 690 days since the Houthi rebels launched their attacks on ships sailing in the Red Sea and 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 not initiate a ceasefire for now. Houthi leader Abdul-Malik al-Houthi stated that attacks on Israeli sea lanes will continue until, as he said, “[…] “The aggression against Gaza ceases and the unjust siege is completely lifted.”
Murphy said the Houthis may not consider the ceasefire to meet their demands, and “they could very well make the demand for an absolute Palestinian state a condition for stopping the attacks, a challenging proposition,” he added.
He said there are many pieces of the puzzle that will have to fit before global shipping lines can justify putting their crews at risk when transiting the Red Sea, even though it saves transit time and costs.
“These are pieces of a geopolitical puzzle and are therefore outside the control of shipping lines,” Murphy said. “The lines are likely to require very firm commitments from the Houthis not to carry out further attacks, as well as increased security support from Western forces, before they will even consider a return to Suez, and both of these may be difficult to achieve,” he explained.
Furthermore, shipping networks are very complex and “heavy beasts,” in Murphy’s words, to navigate.
For example, moving a single weekly service to a Suez Canal route involves 14 vessels on a 98-day round trip, of which 12 would be returned to Suez and the last two would be removed from service, Murphy explained. “These are operations that require several months of implementation and not a decision taken lightly, especially if there is a real risk of having to reverse course and go back around Africa, if attacks return to the Red Sea,” he said.
Then, once ocean carriers decide to cross the Red Sea again, congestion is expected to occur at ports because ships taking the shortest route through the Red Sea and Suez would arrive at ports in Europe and Asia at the same time as ships that traveled around the Horn of Africa.
When conditions allow the resumption of Red Sea transits, he said it would make more sense for the three major global cargo shipping alliances (Premier Alliance, Ocean Alliance and Gemini) and the world’s largest shipping company, MSC, to return to a Suez route in separate stages. “So this could potentially be manageable, but given the high-stakes game of the prisoner’s dilemma, we’re likely to see them all rushing back to Suez in similar time frames,” Murphy said.
In the worst case, congestion could last for several months and, as port congestion increases and everything slows down, ships become stuck outside the port, resulting in traffic disruptions and blank (cancelled) departures. “If we see a simultaneous shift to Suez between all three alliances and MSC, then we are likely to see congestion and disruptions for at least 2-3 months, but could last up to 4-6 months,” Murphy predicted.
Port congestion would create an artificial shortage of ships because they would not be available to be loaded with additional goods.
“We are likely to see a spillover effect across all deepwater trade,” Murphy added.
That situation would also lead to ocean freight rates rising, as they have historically done in the past, with spot rates increasing as much as three to five times longer than long-term averages, according to Murphy.
Ultimately, Murphy said the additional vessels added to the ship line to accommodate longer transits around Africa should reduce ocean freight rates because there will be too many ships available compared to demand.
Overcapacity of vessels could cause freight rates to drop to 2023 levels or lower, Murphy said, adding that the earliest he would expect to see a decline in oversupply of vessels would be around 2028 at the earliest.
As for an initial return to the Red Sea, he believes that a reasonable forecast would be to coincide with the Chinese New Year of the Golden Week. But he added: “I think it would be overly optimistic to assume that all of this could work 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 route would have a huge cost advantage, compared to those continuing to circle Africa, due to faster transit and using less fuel.
“The lines most eager to return to the Suez route 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 route,” he said.
