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If we return to the Suez Canal, who will be first in line?
2025-01-17 10:25

If we return to the Suez Canal, who will be first in line?

by Destine Ozuygur •

With the whole world talking about the Israel-Gaza ceasefire announcement yesterday, it’s expected that supply chain stakeholders will be eyeing any immediate impacts to now well-established routing past the Cape of Good Hope. After all, expectations for Europe - Middle East, Transatlantic, and Asia - Europe trades have long since shifted.

The initial thoughts from our analysts echo the general sentiment that it’s far too early to expect any formalized changes in the next few weeks. The news may have rung a little differently 6 months ago when carriers were still struggling to adjust to the new capacity demand necessitated by longer transit times. Now that a semblance of manageable reliability, capacity stability, and favorable profits have been reached - it’s no wonder that they aren’t clamoring to jump back in.

Putting aside the question of what to do with successfully absorbed capacity and the need for reassurance that Houthis will not attack vessels despite a freshly announced ceasefire- there is also the stark reality that carriers are on the cusp of actualizing carefully planned network overhauls for 2025's new alliances. Restructuring the vessel schedules for Premier Alliance and the Gemini Cooperation that are slated to begin as early as February 1st would be a massive undertaking that requires full confidence in political reparations, along with a willingness to shoulder a short-term loss in capital gains.

If any global players were to take the plunge, who would the first likely candidates be? Back in November, we discussed some flip-flopping witnessed between Suez Canal and Cape of Good Hope transit preferences on scheduled voyages for major non-alliance services. Most notably, CMA CGM strongly suggested the possibility of a return to the Suez Canal in the new year on the Transatlantic CMA - INDAMEX where they are currently partnered with COSCO and OOCL. After several weeks of close observation our team ultimately concluded it would be highly unlikely to see an organized shift amongst carriers until mid-late 2025.

Given the ceasefire announcement, the relative willingness of both CMA CGM and COSCO to float the possibility of a return these past few months, and the fact that the highly popular CMA - INDAMEX service will survive the alliance reshuffle and remain as is - we would keep an extra close eye on her schedules.

In another noteworthy case for these partners - the CMA CGM TITUS which has been deployed to the CMA - MEDEX since August 2022 - was the only vessel out of the 11 slot service to share a Suez transit in her schedules in the final months of 2024 and to actually complete these transits on November 23 and December 31. She’s currently scheduled to complete her next Cape of Good Hope transit on February 12, but seeing as how she’s en route to Marsaxlock with a current ETA Jan 18, they could still opt for routing her back through the Mediterranean passage on her way to Jeddah.

As for the alliances, the only service to utilize the Red Sea passage on a regular basis has been the OCEAN - MED5. We established earlier this week in our coverage of Ocean Alliance’s Day 9 announcement that despite COSCO’s stated intent (ie the very last section of their announcement) to better serve client interests through transshipment options in the region, the MED5 was still the only service on their Day 9 Product brochure that displayed the existing Suez passage on its mapped route.

It is also crucial to point out that there are already existing plans to utilize the Suez Canal on 3 Europe - Middle East services in the Gemini Cooperation lineup. The 2-3 slot GEM - MEA-MED Bridge 1, GEM - MEA-MED Bridge 2, and GEM - MEA-MED Bridge 3 all have first sailings beginning the first week of February. The 4,360TEU KASSIAKOS which will deploy to the GEM - MEA-MED Bridge 3 on February 1 will coomplete the first Suez Canal transit of these vessels on February 4.

While we cannot definitively say who will be the first to formally dip their toes back in this water, the relatively generous timing for Ocean Alliance’s new Day 9 network roll-out in April and previous tests from CMA CGM, OOCL, and COSCO on their partnered non-alliance services suggest we could see an early appearance on these schedules first. However the next few weeks unfold, our team will continue to keep a watchful eye on long-term schedules and customer advisories for early signals, as always.

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