Suez Canal revival Faces Complex Hurdles Despite Red Sea Calm
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Despite easing tensions, a full return to normal shipping traffic through the Suez Canal remains a distant prospect, hampered by security concerns, economic pressures, and logistical bottlenecks.
At first glance, the calming of the situation in the Red Sea might suggest a swift return to business as usual for global shipping. However, the reality is far more nuanced. today, shipping companies are navigating a complex web of factors beyond immediate security – including the potential for fluctuating shipping rates, persistently high insurance costs, and the looming threat of overwhelmed European infrastructure unable to handle a sudden influx of vessels.
The Shadow of Conflict and the Cape of Good Hope Detour
The disruption began in late 2023 when the Houthis, a rebel group controlling much of northern Yemen, initiated attacks on commercial and container ships in the Bab el-Mandeb strait and the Red Sea. These attacks, framed as solidarity with Palestinians in Gaza, specifically targeted vessels linked to Israel and its allies.
In response,shipowners began rerouting the majority of their fleets around the Cape of Good Hope,adding approximately 15 days to voyages destined for Asian ports.According to David Knobloch, managing director and co-owner of NTG Air & Ocean, over 100 attacks on international ships in the Red Sea have been confirmed over the past two years, with the most recent occurring on the minervagracht in September 2025.
Suez Canal’s Critical Role and Current Status
The Suez Canal remains a vital artery of global trade, handling around 52 ships daily in 2023 and accounting for up to 12% of world trade volume. The diversion around South Africa extended transit times to 34-55 days from major Chinese ports to northern German ports. Though, Knobloch notes a surprising benefit: increased transportation reliability.
“There has been an increase in sea freight prices due to the longer route, but on the other hand, compared to the journey through the Suez Canal, the increase is not so notable, as in the case of transit through the Suez Canal, transit surcharges and war risks are included in the pricing,” he explained.
A Fragile Calm and Renewed Threats
While the situation has improved,the threat remains. The cost of rerouting ships via the Cape of Good Hope is substantial, estimated at $6-7 billion annually, noting that passage fees for an Ultra Large Container Vessel can reach $1 million, based on displacement.”Despite the incentives and discounts to which shipowners are being lured back by Egypt, we will rather follow a gradual return so that shipowners avoid as much as possible all the mentioned risks,” he said.
Beyond Security: Capacity Concerns and European Infrastructure
The issue extends beyond security and economics. Shipowners are wary of creating excess capacity in the market. The longer routes implemented during the crisis reduced overall shipping capacity by 9-10%, driving up freight rates. The introduction of a record number of new ships in 2024 and 2025 has already pushed prices down, and a sudden return to the Suez Canal could exacerbate this issue, forcing carriers to idle vessels.
Furthermore, European ports are already struggling with capacity.A mass return to the Suez Canal could overwhelm infrastructure, especially rail networks. “If it happens that the situation calms down and shippers return to transit through the Suez Canal, then there could be a collapse in the ports and an overload of the infrastructure, thanks to insufficient capacities,” warned Knobloch, citing rail shutdowns, terminal closures, and ongoing modernization projects as contributing factors.
Molnár echoed this concern, stating that a simultaneous arrival of ships rerouted via Africa and those returning through Suez would create a logistical nightmare. “In short, the ships run in a certain rhythm and suddenly a part of the ships, let’s say approximately 14+ days’ capacity, would appear earlier. It would be a problem both for the smoothness of the service, and for the ports, and for subsequent shipments. So it has to be done gradually.”
Ultimately, a gradual and cautious approach appears to be the most likely scenario, as shipowners prioritize stability and avoid repeating the disruptions of the past few months.
