Despite reports that Yemen’s Houthi rebels will stop their attacks on commercial vessels in the Red Sea, shipping analysts think carriers will need more assurance of safe passage before resuming use of the Suez Canal.

It has been almost two years since the Houthi attacks forced shippers to begin avoiding the Suez Canal and instead use the much longer route around the southern tip of the African continent for trade between Europe and Asia.

Lars Jensen, president of consultant Vespucci Maritime, who has covered the Red Sea issue on his social media accounts since the onset, urged caution for carriers about returning to the shorter route too soon.

“I have already seen numerous posts flagging this as a sign of potential return to the Suez routing soon,” Jensen said. “I would urge a bit of caution at such an interpretation just yet.”

Jensen noted that the rebels observed a ceasefire earlier this year – from January to March – during a pause in the fighting between Israel and Hamas.

“When hostilities resumed in Gaza, the Houthis also resumed their activities,” Jensen said.

Jensen said that even as the current ceasefire is about a month old, there have been smaller incidents indicating the current truce remains somewhat fragile.

“Based on the developments earlier this year, it appears premature to interpret the Houthi ceasefire as a sign of an imminent return by the shipping lines,” Jensen said. “If that was to be the case it would require that the shipping lines have changed their risk tolerance compared to their view just eight months ago.”

While the reopening of the Red Sea/Suez Canal route would be seismic for global shipping, Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said 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,” Sand said.

“Transits may start to increase if there is a perceived lower risk, but we are unlikely to see an imminent return to 2023 levels,” Sand said.

IMPACT ON RATES
Longer sailing distances around the Cape of Good Hope are currently absorbing around 2 million TEU (20-foot equivalent units) of global container shipping capacity and increasing the transport demands on the fleet.

A large-scale return to the Red Sea would reduce the transport work required of the fleet and potentially cause freight rates to plummet – unless carriers take drastic measures, such as idling, demolition, slow-steaming and widespread blank sailings, Sand said.

“Average spot rates from Asia to North Europe, the Mediterranean, and the US East Coast – three trades that would ordinarily transit the Red Sea – are all down by more than 50% since the start of year,” Sand said. “A large-scale return of container ships to the Red Sea would flood the market with capacity and cause freight rates to plunge even lower across trades at a global level, not just those directly impacted by the diversions.”

Sand said carriers are already heading into loss-making territory and freight rates are expected to fall by as much as 25% globally in 2026, even with no change to the situation in the Red Sea.

“Shippers should also be making contingency plans because a large-scale return would cause severe disruption across global ocean supply chains as services transiting the Suez Canal are reinstated,” Sand said. “There are still many questions to be answered, but the impact of a large-scale return would be seismic for shippers and carriers.”

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.

They also transport liquid chemicals in isotanks.
Source: ICIS by Adam Yanelli, https://www.icis.com/explore/resources/news/2025/11/12/11154537/return-to-red-sea-not-imminent-despite-houthis-pause-on-attacking-commercial-vessels/