After more than two years of interruption, Maersk resumes sailing in the Red Sea. Analysis suggests that "if Red Sea routes are restored, 6% to 8% of the global container fleet will no longer be needed."
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After more than two years of interruption, shipping routes through the Red Sea and the Suez Canal may fully reopen.
On Thursday, January 15, Maersk, the world's second largest container shipping company, announced that it will officially resume its Middle East-India to US East Coast (MECL) service via the Suez Canal.
The company says this move is based on "improved stability in the Red Sea region." Previously, Maersk had stated it would only fully resume operations if safety is assured.
Earlier this week, Maersk announced that a ship on its MECL route had successfully passed through the Bab el-Mandeb Strait—a previous focal point for Houthi attacks—marking the second successful trial voyage since December of last year.
Peter Sand, Chief Analyst at shipping market tracking agency Xeneta, noted:
If Red Sea routes are fully restored, 6% to 8% of the global container fleet will no longer be needed, shifting market balance to a disadvantage for carriers.
The market reacted cautiously to the news. Maersk ADR shares fell more than 5% on Thursday, reflecting investor concerns that increased capacity could lead to lower freight rates.
Shipping Giants Return in Succession
Maersk is not the first shipping company to return to this route.
Earlier this month, CMA CGM, the world's third largest container shipping group, restored passage through this waterway in its India-Americas Express service.
Since last November, when Yemen's Houthi forces said they would stop attacks on passing ships after a Gaza ceasefire agreement, container shipping companies have been weighing whether to return to the Suez Canal.
The large-scale reopening of Red Sea routes will end over two years of shipping disruption, shorten transit times between Asia and Europe by up to two weeks, and reduce the number of ships required to meet demand, thereby lowering the freight rates shipping companies can charge.
Jon Gahagan, President of U.S. maritime risk consultancy Sedna Global, stated:
The threat from the Houthis still exists, but with the Gaza ceasefire, Maersk's decision to return to the Red Sea may be a natural move.
Geopolitical Risks Remain
Analysts warn that the situation in the Middle East remains volatile.
Earlier this week, U.S. President Trump’s remarks about military intervention in Iran have sparked new concerns.
Peter Cook, former head of the Maritime Industry Security Association, commented:
It’s too difficult, because we have no idea what actions the Trump administration will take.
This uncertainty adds complexity to shipping companies' decisions, and the market is still watching to see if more companies will follow suit in resuming Red Sea routes.
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