Ships cautiously return to Suez Canal

The container prices are falling this week. Further declines are on the horizon as more and more shipping companies are gradually allowing their container ships to return to the Red Sea and the Suez Canal. But it must remain calm in the region. The container prices in the World Container Index from Drewry have decreased by 4% this week. This is due to the spot rates on the lines from China decreasing. The demand is weak, Drewry indicates, and as a result, the rates are falling despite upward pressure as Chinese factories close around the Chinese New Year (from February 17 to March 3). The hardest hit was from Shanghai to New York, with a drop of 10%. A decrease of 7% was observed to LA and 3% to Rotterdam. Year-on-year, container prices from China to Rotterdam have now fallen by 35%. Conversely, there is a decrease of 1% compared to a year ago. Rates from Rotterdam to New York were 42% lower over the past year, but conversely, they rose by 19%. Drewry has launched a tracker this week for the situation in the Red Sea, which will appear every other week: the Red Sea Diversion Tracker. It shows that last week, 26 container ships passed through the Suez Canal. This is the highest weekly number in five weeks, but significantly lower than the normal level of about 80 per week before the Red Sea crisis at the end of 2023 (55 in the northbound direction and 25 in the southbound direction), according to the data platform. In week 1, only ten container ships passed through the Suez Canal, but the week after Christmas is traditionally quiet in shipping. In week 2, the number of ships rounding Cape of Good Hope also increased, from 82 in week 1 to 203. According to the tracker, in week 2, five container ships of over 8,000 TEU from CMA CGM/APL and MSC passed through the Suez Canal. Drewry expects that the larger shipping companies will remain cautious and gradually send more ships through the canal. A gradual return could prevent congestion in European ports. However, Lars Jensen, CEO of Vespucci Maritime, believes that 'if the conditions remain peaceful,' after the Chinese New Year, several shipping companies will start sailing through the Suez Canal again. He finds that an important signal is that Maersk has announced that its MECL service (which is not part of the Gemini partnership) will now permanently sail through the Suez Canal. In a statement, Maersk indicates that it will closely monitor the security situation in the Middle East. Any changes to the MECL schedule will depend on the ongoing stability in the Red Sea area and the absence of escalation of conflicts in the region. IranMeanwhile, Iran has threatened to take action against American ships should the U.S. attack the country, including closing the Strait of Hormuz. According to Reuters, more than 25 bulk carriers and 25 other ships, including container ships, are anchored outside Iranian ports waiting for what may come. Freightos expects that a potential closure of the Strait of Hormuz would primarily impact the oil trade. According to Container Trade Statistics, only 2% to 3% of global container flows go through the Strait of Hormuz. Disruption of the container market would therefore primarily be felt locally, according to the data platform.