As long as the ceasefire between Israel and Hamas holds, the Houthi are not planning any further attacks. However, a return of shipping to the Red Sea would have serious consequences.
Since the ceasefire between Israel and Hamas began, the Red Sea has been quiet. The Yemeni Houthi militia have now announced that they do not intend to attack any more merchant ships and have also lifted their naval blockade of Israeli ports. However, if the conflict in the Gaza Strip continues, it is possible that the attacks will continue. This is according to a letter sent to Hamas by the newly appointed Houthi Chief of Staff, Yousef Hassan Al-Madani, and published on social media.
The Houthi have attacked several merchant ships in the Red Sea since November 2023. A total of four ships have been sunk and nine sailors have lost their lives. The presence of the organization forced many shipping companies to avoid the route via the Suez Canal and instead choose the detour via the Cape of Good Hope. This development led to long delays, higher costs and therefore rising freight rates. Emissions from global container shipping also increased significantly.
Detour ties up 2 million TEU
According to an analysis by industry service provider Xeneta, the route via South Africa ties up around 2 million TEU of capacity. If container shipping were to return to the Red Sea, this would lead to a “drastic decline” in freight rates, it says. Countermeasures would include decommissioning, scrapping, slower or canceled voyages. However, it is questionable whether the shipping companies will resume traffic in the Red Sea on the basis of the Houthi’s assurances. Back in May, US President Trump announced that the group had “surrendered”, but this was subsequently denied; the attacks continued.
“Details are sketchy and you cannot base the safety of crews, ships and cargo on the word of Houthi militia,” said chief analyst Peter Sand. “Carriers need far more assurance than that and, perhaps more importantly, so do insurance companies. Different carriers have different tolerances to risk and we have seen some intermittently testing the water, with the CMA CGM Zheng He and CMA CGM Benjamin Franklin making voyages through the region in November, but generally the number of container ships transiting the Suez Canal has been trending downwards during 2025.”
If the risk is deemed to be lower, transits could increase again, according to Sand. However, a return to the 2023 level is unlikely in the near future.
Return would flood the market
“Average spot rates from Far East to North Europe, Mediterranean and US East Coast – three trades that would ordinarily transit the Red Sea – are all down more than 50% since the start of year,” Sand continues. In his opinion, a large-scale return of container ships to the Red Sea would flood the market with capacity and cause freight rates to collapse further worldwide, and not just in the areas directly affected by the detour. “Carriers are already heading into loss-making territory and freight rates are expected to fall up to -25% globally in 2026, even with no change to the situation in the Red Sea.”
Xeneta recommends making contingency plans, as a large-scale return would cause “significant disruption” to global sea freight chains once connections through the Suez Canal resume. “There are still many questions to be answered, but the impact of a largescale return would be seismic for shippers and carriers,” says Sand.
A resumption of the Suez route would also have serious consequences for European ports. According to a calculation by Sea-Intelligence, arrivals from Asia would temporarily double in the event of an immediate return, and the port handling volume would be almost 40% higher than the previous peak. (JW)
