Amid a global supply chain wracked by geopolitical strife, trade wars and parochial upheavals, the prospective return of the world’s largest container operators to the Red Sea-Suez Canal route is good news for most of the Middle East, but could signal leaner times for ocean transport providers, an analyst says.
“The opening of the Red Sea will lead to a drop in container [purchase] prices and freight rates and a massive surge in container availability, putting pressure on NVOCC [non-vessel operating common carriers] in that region,” said Christian Roeloffs, chief executive of marketplace Container XChange, in a March forecast.
The biggest container carriers have diverted services away from the Suez Canal-Red Sea-Gulf of Aden route since early 2024. That was shortly after the start of the Gaza war, when Iran-backed Houthi rebels in Yemen attacked merchant shipping they claimed was linked to Israel.
While Israel and Hamas work through a multiphase ceasefire agreement, shipping executives have said the region is still too unstable to guarantee the safety of ships and their crews.
The United States on Wednesday sanctioned Houthi leaders they say conspired with Russia to import arms into Yemen and supplied Yemeni fighters for the war with Ukraine. The U.S. also said the Houthis provided safe passage for Russian and Chinese ships through the Red Sea. The sanctions came one day after the U.S. re-declared the rebels a foreign terrorist organization.
Roeloffs said the return of one carrier to the Red Sea is likely to set off a domino effect, with other carriers to follow. Notably, CMA CGM of France continued to operate scheduled Red Sea services throughout the attacks — often under military escort.
Until then, Roeloffs said logistics providers will play a guessing game with rates and capacity, though not without some new opportunity.
“As supply continues to rise while cargo demand softens, downward pressure on prices is becoming a major challenge,” he said. “Freight rate instability could further increase financial risks for smaller operators. However, shifting trade patterns are also creating new container leasing opportunities, particularly in Southeast Asia and Latin America, where demand is rising amid evolving global supply chains.”
As of Tuesday, average prices for 40-foot high-cube cargo-worthy containers on the Container xChange platform had increased in Europe, Central and Southeast Asia, Latin America west, and Southern Africa. Prices have generally declined across North America, the Middle East, the Indian Subcontinent, northeast Asia and East Africa.
