Approximately one-third of deep-sea container vessels that had rerouted around the Cape of Good Hope since late 2023, due to Houthi attacks, have now reverted to using the Suez Canal. However, according to maritime analytics firm Xeneta, this return to the shorter Red Sea route has not translated into a distinct downward pressure on freight pricing.
Xeneta observes that the market has not differentiated pricing between the two routing options. Spot rates for both Suez transits and longer voyages around Africa are effectively merged, making it impossible to isolate the impact of the Red Sea return on pricing. This suggests that other market factors are maintaining elevated rate levels.
For freight forwarders and shippers, this means that despite some operational normalization in the Red Sea, the expected relief in ocean freight rates has not materialized. Capacity returning to the Suez Canal is not creating a surplus that would drive down prices, as the market seems to be absorbing this capacity without a significant rate adjustment. Forwarders should continue to factor in current rate levels for both routing options, as no clear cost advantage is emerging from the Suez return.
