Yemen Monitor/Newsroom
The recent escalation of tensions in the Red Sea region has had a significant impact on global container shipping. As a result of increased Houthi attacks, almost all major container lines have diverted their vessels to the Cape of Good Hope route, significantly lengthening their journey times.
Despite the growing threat, CMA CGM remains the only major carrier to continue transiting the Suez Canal. Their 11-ship service, operated in partnership with COSCO, OOCL, and Evergreen, is the only significant container line still using the Suez route. However, analysts from shipping consultancy Linerlytica argue that any further escalation of the conflict would have a limited impact on the overall container market, as only a small percentage of the global container fleet relies on the Suez Canal.
The decline in Suez Canal transits has had a substantial financial impact on the Suez Canal Authority (SCA). Revenues for the financial year ending in April 2024 fell by nearly 75% compared to the previous year.
This is primarily due to a decrease in the number of ships passing through the canal, which has been influenced by both the regional conflict and the shift in shipping routes.
According to Linerlytica only 72 of the 513 ships currently operating on Asia-Europe trades are still using the Suez Canal, and they are mainly smaller operators based in China, Russia, Singapore, Turkey and UAE.
As the situation in the Middle East continues to evolve, the future of container shipping through the Suez Canal remains uncertain.
In December 2023, the US formed a multinational coalition to protect maritime traffic in the Red Sea after the Houthi group announced it would target ships linked to the Israeli entity in solidarity with the Palestinian people in Gaza Strip. The group later expanded its operations to include ships linked to the US and the UK after the two countries launched strikes against Houthi sites in Yemen.
The ongoing conflict in Gaza and the increasing involvement of regional actors threaten to further destabilize the region, potentially impacting trade routes and the global economy.
