More carriers return to Suez

Since then, most carriers continued the long route. Some smaller niche carriers did establish a few routes typically from Asia into the eastern Mediterranean, and CMA CGM also gradually increased the number of sailings through the Suez. But mostly all major capacity continued to operate around Africa. Maersk and Hapag-Lloyd tried to initiate a normalization back in January/February 2026, but this was reversed as the US/Iran war and resultant Hormuz crisis erupted.

In early July, Maersk and Hapag-Lloyd then switched one of their Asia-Europe services to Suez, followed by a second service in August. Additionally, Maersk switched two of their own services to North America and West Africa back to Suez. MSC followed suit in early September with the announcement of 4 services switching to a Suez routing between Asia and Europe. Then around September 10th, updated vessel schedules from CMA CGM showed that COSCO was now switching 1 service westbound and 5 services eastbound to a Suez routing.

This is positive news for Asia- Europe supply chains; however, this comes with a range of longer- term consequences as well.

Normalization changes the capacity balance

When the Red Sea crisis erupted, this led to global demand measured in TEU*Miles to grow some 20-30%. This in turn resulted in capacity shortages and higher freight rates.

Obviously, when services switch back to Suez, sailing distances will shorten and hence there will be a negative impact on global demand in TEU*Miles. In case only 50% of the capacity goes back to Suez, it results in a demand growth of 0% in 2027 measured in TEU*Miles – and this in the case where demand in TEU (without distance) continues to grow as fast as we have seen thus far in 2026. If the Suez route is 100% implemented, we will see 8% demand growth in 2027 measured in TEU*Miles.
Therefore, without considering the very large order book, the market is poised to weaken because of the Red Sea normalization.

However, that does not necessarily mean the current normalization trend will result in an instant weakening of the global market. Presently there is a capacity shortage in Asia driven by port congestion. This port congestion is the result of a range of typhoons which have impeded port operations and caused a backlog of vessels waiting to be serviced.

If we look at the port congestion from the pandemic as well as the port congestion right after the Red Sea crisis erupted, the current port congestion could well take 2-4 months to fully clear; hence absorbing parts of the capacity released from the Suez normalization.

Additionally, we are heading into a situation of capacity restrictions in the Panama Canal. This is due to the El Niño weather phenomenon, which is likely to result in declining water levels for the canal. This will to some degree absorb a bit of overcapacity.

Hence, shippers should be aware that in the very short term, elements such as port congestion in Asia and possible challenges in the Panama Canal can prolong the current high spot rates due to insufficient capacity.

Overcapacity ahead in the longer term

But structurally, in the longer term, the market is heading into clear overcapacity, which will result in not only lower spot rates, but also more erratic service patterns as carriers will mitigate the impact by cancelling many services on short notice.

Finally, a caution for shippers: It is good news that the Red Sea crisis is slowly being normalized. The Houthis are presently saying that international shipping is free to pass the Bab el-Mandeb, with Saudi shipping being the only exception. However, there is nothing to prevent them from suddenly changing their minds. Shippers should therefore at least be prepared for a situation where vessels might suddenly revert to a round-Africa routing from one day to the next.