The Houthi militia have reportedly ceased attacks on Israel and shipping in the Red Sea. Analysts say the move could have a seismic effect on global container shipping, but stress that uncertainty remains.
Peter Sand, Chief Analyst at Xeneta, said: “Details are sketchy and you cannot base the safety of crews, ships and cargo on the word of Houthi militia. Carriers need far more assurance than that and, perhaps more importantly, so do insurance companies.”
Sand noted that carriers vary in their tolerance to risk. Some, including the CMA CGM Zheng He and CMA CGM Benjamin Franklin, have made voyages through the region in November. However, the number of container ships transiting the Suez Canal has generally declined through 2025.
“If there is a perceived lower risk, transits may start to increase,” Sand added. “But we are unlikely to see an imminent return to 2023 levels.”
Current diversions around the Cape of Good Hope have absorbed about 2 million TEU of global container shipping capacity, adding to the fleet’s workload. A large-scale return to the Red Sea could ease transport demand and cause freight rates to drop sharply, unless carriers idle ships, slow-steam, or cancel sailings.
“Average spot rates from the Far East to North Europe, the Mediterranean and the US East Coast are all down more than 50% since the start of the year,” Sand said. “A large-scale return would flood the market with capacity and cause freight rates to plunge even lower globally.”
He added that carriers are already operating near loss-making levels and that freight rates could fall by up to 25% worldwide in 2026 even if the Red Sea situation remains unchanged. Shippers are urged to prepare for disruptions as services through the Suez Canal are reinstated.
“There are still many questions to be answered, but the impact of a large-scale return would be seismic for shippers and carriers,” Sand concluded.
Xeneta is a Norway-based ocean and air freight market intelligence platform providing real-time data and analytics on freight rates, capacity, and market trends. It serves carriers, freight forwarders, and shippers globally.
