Two developments are converging on the Asia-Europe route. First, container spot rates have been under pressure for approximately three months. Second, more shipping lines and large container ships are again transiting through the Suez Canal and the Red Sea.
Gemini, together with Maersk and Hapag-Lloyd, has switched several services back to Suez routing. CMA CGM, MSC, and Cosco have also shown increased presence on individual connections in the Red Sea.
When ships transit through Suez instead of around the Cape of Good Hope, transit time decreases. This arithmetically frees up ship capacity. This can put additional pressure on freight rates.
For shippers, this initially sounds favorable. Nevertheless, one should not assume that rates will only continue to fall. Port congestion, Golden Week, blank sailings, and possible new security issues can quickly create capacity shortages again.
Blank sailing means that a shipping line removes a scheduled departure from its schedule. This can quickly reduce available capacity in the short term.
For 2027 contract negotiations, this exact mix will be interesting: greater nominal capacity, but continued high uncertainty on individual routes.