DESPITE THE ARMED FORCES OF YEMEN'S PROMISE TO LIMIT THE RANGE OF ATTACKS TO ISRAELI-BOUND VESSELS, CARRIERS REMAIN CAUTIOUS ABOUT RESUMING RED SEA ROUTES. The statement comes after Israel reached a 42-day ceasefire agreement with Hamas, but has not yet prompted the carrier to change its operating strategy.

“We will resume navigation only when we confirm that the Red Sea is safe enough.” Hapag spokesman TimSeifert said Maersk also expressed a similar stance, saying the latest development was “positive,” but stressed that it would continue to keep a close eye on the situation.

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Since November 2023, Houshi-armed attacks on shipping have forced most ships to bypass the Cape of Good Hope and avoid the Suez Canal, resulting in a 12% reduction in global fleet capacity and increased freight costs. The price of spot shipping on Asian-Nordic routes jumped from $1,379 per 40-foot standard container (FEU) at the end of 2023 to a peak of $8,558 in mid-2024.

Analysts warn that resuming the Red Sea route could disrupt the supply balance, restore the extra momentum brought by the resumption of routes, and record new ship deliveries, could lead to overcapacity and depress freight prices. PeterSand, chief analyst at Xeneta, estimates that carriers may need to remove 180 million TEUs of momentum to prevent a market crash.

While measures such as dismantling vessels and reducing cruise speed may help mitigate the impact, industry experts predict the adjustment period will be volatile. Sea-Intelligence's AlanMurphy said: “The resumption of the Suez Canal route could reverse the increase in freight rates over the past year, leading to a sharp drop in freight rates.”

As carriers prioritize safety, the overall shipping market faces uncertainty, and supply chain and freight price stability are likely to change significantly.

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Source: https://www.joc.com/article/carriers-eye-red-sea-transits-after-houthi-rebels-pledge-restraint-5925939