Major Carriers Test Red Sea Return as Suez Route Reopening Could Release 9% of Global Capacity

Major container carriers are beginning to explore a return to the Red Sea and Suez Canal route after over a year of diversions around the Cape of Good Hope. CMA CGM announced the return of three services to the Suez Canal in late 2025, including a full loop connecting India/Pakistan with the US East Coast that cuts round-trip transit times by two weeks. Maersk made an unannounced transit through the Red Sea in December 2025 with the Maersk Sebarok. These early moves signal growing carrier confidence, though a full return to pre-crisis levels remains distant. The diversions, which began in late 2023 due to Houthi attacks on merchant vessels, have absorbed approximately 9% of global container capacity and added 13-15 days to transit times on key routes like Far East to Mediterranean.

The potential return to the Red Sea represents a pivotal moment for ocean freight markets already grappling with overcapacity. A large-scale resumption would release significant vessel capacity back into the market, exacerbating the supply glut created by record newbuild deliveries. This could trigger severe downward pressure on freight rates, with HSBC analysts warning of an additional 10% rate decline beyond the 9-16% drop already anticipated. The timing of any return is critical—carriers ideally need to readjust services immediately after Lunar New Year (mid-February 2026) when demand traditionally slumps, allowing disruption to subside before peak season. However, carriers remain cautious, requiring sustained stability, acceptable insurance conditions, and predictable chartering terms before committing significant capacity to the route.

A Red Sea return would initially cause severe congestion at European ports as vessels arrive earlier than scheduled and potentially in clusters, reversing the congestion patterns seen when services adjusted to the Cape route. Container and equipment shortages could emerge at Far East origin ports as ships return to shorter routes. Freight rates on Asia-Europe lanes, which saw spot rates increase 141-142% compared to October 2023 levels, would face immediate downward pressure. Carriers would need to deploy capacity management tools—blank sailings, vessel idling, scrapping, or slow steaming—to prevent rates from collapsing. Shippers would need to manage earlier cargo arrivals and should negotiate flexible contract terms with index-linked pricing or renegotiation triggers. The removal or reduction of Red Sea surcharges would also become a key negotiation point.

Monitor carrier announcements regarding service adjustments, particularly from alliance partners Maersk and Hapag-Lloyd, whose Gemini network targets 90% arrival reliability. Track the fragility of the Gaza ceasefire agreement and any resumption of Houthi activity that could force another reversal. Watch for port congestion reports at major European hubs like Rotterdam, Hamburg, and Antwerp as early indicators of return-related disruption. Observe spot rate movements on Asia-Europe lanes and carrier capacity management actions (blank sailings, slow steaming announcements). The spring 2026 period will be critical—if carriers successfully navigate the post-Lunar New Year transition without major disruption, a broader return becomes more likely for the remainder of the year.