Israeli shipping company Zim recently stated that it is formulating operational plans to resume navigation through the Suez Canal and expects to restore transit on this route once the security situation stabilizes.
Company CEO Eli Glickman revealed in today’s earnings conference call that the safety of crew, customers, cargo, and vessels is always the company’s top priority.
Glickman pointed out that although the current ceasefire agreement in the Gaza area brings positive developments, fully resuming navigation through the Suez Canal requires further confirmation of the durability of the ceasefire. The company is closely monitoring the situation and believes the possibility of resuming navigation in the near future is increasing. He emphasized: “Once the security situation stabilizes, we will be ready to take action to support this transition.”
For shipping companies, resuming navigation through the Suez Canal presents both opportunities and certain risks. Glickman stated that restoring the route will help improve fleet efficiency and save operational costs, but it may also release the capacity currently occupied by detours via the Cape of Good Hope route, which could increase pressure on freight rates.
Zim primarily derives most of its revenue from the Trans-Pacific route between Asia-Pacific and the United States, but it also hopes to expand to other routes between Asia and Europe. Glickman revealed that the company is currently awaiting insurance company approval to re-enter the Red Sea. “In summary, once conditions permit, we will resume navigation through the Suez Canal as soon as possible.”
Additionally, Zim announced plans to respond to market changes through flexible fleet deployment. Company CFO Xavier Destriau stated that reopening the Suez route will improve efficiency and bring operational cost savings, but it may also push freight rates higher. To cope with potential freight rate fluctuations, Zim has decided to return 22 chartered vessels this year and plans to continue adjusting the fleet configuration by the end of next year.
Zim currently operates 129 vessels. It is expected that by 2026, 20 of the company’s vessels will face lease renewals, including 3 expiring in 2025 and 17 expiring in 2026. The company stated that flexible vessel capacity adjustments will help it respond to changes in market demand or adjustments in the company’s commercial strategy.
