Global shipping lines likely to revert to Suez Canal route soon

With US lead Naval task force intensifying patrolling of the red sea and launching missile attacks on the drones unleashed by Houthi rebels, more and more shipping lines have started having relook at the Suez canal shipping route. The decision would help stabilize the freight rates between Asian and European ports

German Shipping line Hapag Lloyd said it would make a fresh assessment of whether to go back to the suez route during the New Year. A decision in this regard would be taken on January 2 its spokesperson was quoted by media reports

Mitsui O.S.K. Lines 9104.T and Nippon Yusen 9101.T, Japan’s largest shipping companies, also said their vessels with links to Israel have been avoiding the Red Sea area for the past 10 days. Both companies said they however were monitoring the situation in the light of presence of US led naval force in the area.

Shipping giants including Hapag-Lloyd and Denmark’s Maersk MAERSK stopped using Red Sea routes and the Suez Canal after Yemen’s Houthi militant group began targeting vessels. They rerouted ships around Africa via the Cape Town to avoid attacks, charging customers extra fees and adding days or weeks to the time it takes to transport goods from Asia to Europe and to the east coast of North America.

Maersk is planning to sail almost all container vessels travelling between Asia and Europe through the Suez Canal from now on while diverting only a handful around Africa. France’s CMA CGM is also increasing the number of vessels sailing through the Suez Canal. CMA CGM is among container lines to have introduced surcharges due to the re-routing of vessels, adding to rising costs for sea transport since the Houthis started targeting vessels.

The Suez Canal is used by roughly one third of global container ship cargo, and re-directing ships around the southern tip of Africa is expected to cost heavily in fuel for every round trip between Asia and Northern Europe.