CMA CGM has announced plans to once again use the shorter, more efficient Suez Canal route amid a pause in violence in the Red Sea region.
A pause in Houthi violence
Yemen’s Houthi leadership has announced an end to their campaign targeting maritime interests. Throughout the conflict, most Western-affiliated shipping companies had avoided the Red Sea out of concern that their vessels might be struck accidentally. With the Houthis now pausing their attacks, this broad threat has diminished, and commercial traffic through the Red Sea and the Suez Canal is expected to return to normal.
The renewed flow of ships will provide a much-needed financial lift to the Suez Canal Authority, though it may negatively impact shipping lines that had been profiting from longer detours around the Cape of Good Hope in Africa.
Suez Canal passage
The announcement came just one day after the U.N. Security Council voted decisively to extend sanctions on the Houthis, who had previously forced commercial vessels to reroute. According to the Suez Canal Authority, conditions are now improving, and the largest container ships have begun passing through the canal once again.
The vessels Helium and Jules Verne completed their transits shortly after CMA CGM’s Benjamin Franklin, the biggest container ship to navigate the canal in two years. Measuring 399 meters long, weighing 177,000 tons, and capable of carrying 17,859 containers, the Benjamin Franklin passed through as part of the northbound convoy traveling from the United Kingdom to Malaysia, then safely continued through the Bab-el-Mandeb Strait.
What should we expect
In the past, the maritime business sector has been affected by several major disruptions, including world wars, pandemics, trade restrictions, and lane closures. The closure of the Suez Canal, which occurred twice, caused significant economic disruptions worldwide, highlighting the canal’s importance.
We can say that CMA CGM’s bold decision to use the Suez Canal despite the risks in the area have paid off. A shorter transit time leads to more voyages as well as lower ocean freight rates. We should expect that other major carriers will also divert their vessels to the Suez Canal, avoiding the route around the Cape of Good Hope, as CMA CGM has demonstrated that it is safe to pass.
Likewise, we can anticipate a significant drop in freight rates on the Europe–East Asia shipping lane. With increased safety in the area, more businesses are likely to expand their services to provide the most convenient options for customers.
