Freight forwarders and shippers today received a customer advisory from Ocean Alliance member OOCL that, what it terms the LL4 service – known as NEU4 by the Ocean Alliance and FAL1 by tonnage provider CMA CGM – would return to Asia via the Suez Canal and transit the Red Sea.
“Please be advised that the service operator has informed OOCL that with effect from APL Merlion 181 E, all future LL4 eastbound voyages returning to Asia are planned to route via the Suez /Red Sea,” it said.
The 13,900 teu APL Merlion is currently heading north off the coast of West Africa, en route to Europe, and according to the eeSea-by-Xeneta liner database, is due to arrive at the canal on 5 January.
The FAL1 service is currently staffed by 15 CMA CGM ships of 13,900-17,850 teu ,and the main effect of returning via Suez is that the round-trip will be reduced from 105 days to 98, allowing the number of deployed vessels to be reduced to 14.
However, this will not result in a drop in the service’s capacity – in fact, it is set to marginally increase through the deployment of even larger vessels
According to eeSea, the current FAL1 average vessel capacity is 15,589 teu, while the 14-strong fleet from January will feature vessels of 13,900 teu to 21,000 teu, with the average increasing to 16,051 teu.
Xeneta chief analyst Peter Sand told The Loadstar it was exactly the same scenario as the Ocean Alliance’s Asia-Mediterranean MED2 service, marketed by CMA CGM as the MEX string, which is also set to make a full-scale return to Suez on its backhaul voyages, beginning with the 15,254 teu CMA CGM Kimberley, set to make a proforma passage through the canal on 10 February.
“The change to the MEX service sailing via Suez reduces the number of slots from 15 to 14, effectively saving one vessel,” he said.
“The same will happen on the LL4 service, so capacity is already starting to be released into the fleet by not sailing longer distances around the Cape of Good Hope.
“The most significant impact will be seen when more services return to the Suez Canal, releasing capacity into the fleet which would put downward pressure on freight rates at a global level,” he explained.
However, the move is unlikely to have any effect on Europe-Asia freight rates, he added.
“Backhaul spot freight rates from Europe to Asia are already rock-bottom – in fact, sub-zero since September, when terminal handling charges were removed – so there will not be much immediate impact on these specific trades because they have little room to fall further,” he told The Loadstar.
The current spot rate for a 40ft from Rotterdam to Shanghai is $451, as per Drewry’s World Container Index.
“Backhaul trades are a smart way to test the water for containerships returning to Suez Canal transits without increasing risk on fronthaul voyages, which carry far more cargo,” he added.
Meanwhile, Vespucci Maritime CEO Lars Jensen told The Loadstar: “The service is operated by CMA CGM… hence this is merely a reflection of CMA CGM’s decisions last week and you should expect to see the same on CMA CGM’s FAL3.”
The fact that these transits are being undertaken by CMA CGM vessels is significant, as they are accorded French naval escorts in the Red Sea, presumably greatly reducing the risk of attack.
However, the wider context is that the industry’s structural overcapacity will ultimately be exposed amid annual contract negotiations between carriers and customers.
“The timing of the Ocean Alliance announcing a return to the Suez Canal on these services is interesting, because it coincides with many European shippers heading into negotiations for 2026 freight contracts,” Mr Sand said.
