A Red Sea return would be a game changer for container shipping in 2026

Container lines deciding to navigate back to the Red Sea is arguably the most important development to watch for in the global shipping market next year. And it’s not a matter of 'if', but 'when'. And should one big company decide it's worth the risk, others will surely follow. The Suez Canal has been a vital link for modern East–West trade for decades, handling over 15% of global goods trade and up to twice that share of global container traffic, particularly consumer goods.

This unprecedented avoidance lasted far longer than expected

Detouring around the Cape of Good Hope has been common practice for most container vessels for nearly two years, following Houthi attacks in the Red Sea region that began in late 2023. This unprecedented avoidance lasted far longer than expected, triggering a rebound in container rates and liner profit margins after their sharp decline from elevated pandemic levels in 2023.

Resuming Red Sea transit saves more than 3,000 nautical miles and roughly 10 days of sailing on the Asia–Northwest Europe route. Over time, this will significantly free up vessel capacity, as the detour currently absorbs around 6% of global fleet capacity on top of frequent delays. That’s why a return will make waves, just as the massive diversion initially did. Following the Gaza ceasefire deal in October, liner companies such as Maersk and Hapag-Lloyd no longer rule out returning to the Red Sea and have indicated they will do so as soon as conditions allow. CMA CGM, which continued some services under naval escort, also expects to resume transits shortly.

Returning to the Red Sea route would be a logical move, but it is also the elephant in the room. Efficiency in customers’ supply chains will eventually benefit from reopening the passage, and so will fuel consumption and greenhouse emissions that peaked due to the extra miles.

But a return to the previous norm will first come with new disruption. Vessels arriving earlier than expected could trigger port congestion, which may again clog container terminals and cause delays for ships and empty containers across supply chains. Container liners might blank sailings to mitigate this effect, but overall, freight rates could rise, especially if this shift coincides with the Chinese New Year.

Once sailing schedules are stabilised, significant downward pressure on rates is likely. More capacity will be released, while new vessels from the extensive order-book* will continue to enter service in 2026. At the same time, container volume growth is expected to remain low, further driving rates down. And this effect will surpass the operational cost savings. Slow steaming could absorb some of the excess capacity, and carriers are expected to accelerate the scrapping of older vessels after five years of minimal idling. Still, this process will take time and will not fully offset the surplus.

*As per November 2025, the container shipping order-book makes up 32% of installed fleet capacity according to Clarksons.

Although a return to the Red Sea could reasonably occur within the next six months, container liners are keen to avoid acting too swiftly. This was evident in Maersk’s statement following a preliminary announcement by the Suez Port Authority. Of course, the safety of vessels, seafarers, and cargo must be sufficiently guaranteed, but there are other reasons to proceed cautiously.

The container shipping sector has endured a year of strain amid trade shocks, alliance restructuring, and an overhaul of sailing schemes. Cape-based schedules have stabilised, and arrival reliability has improved. Carriers want to avoid double disruption - switching back and forth between routes - before committing to the Red Sea and need confidence in the duration of any change. This is particularly important for the new Gemini alliance network of Maersk and Hapag-Lloyd, which has promised customers an arrival reliability of 90%, far higher than the average.

Another reason to be cautious is insurance. Premiums for transiting the canal surged and likely need to fall significantly, or voyages must be approved before proceeding. Carriers will probably start testing the route on the backhaul to Asia with less cargo and lower reliability. All in all, carefully timing the resumption is also in container liners' financial interest.