The business of shipping goods around the world has suffered shock after shock since 2000, culminating in the effective closure of the Red Sea and Suez Canal two years ago.
Don’t say it too loud, but there’s a good chance the waterway can reopen in 2026, reducing transportation costs and easing the strain on global supply chains.
It’s hard to overstate the canal’s importance: It’s a choke point for about 15% of global trade in goods — and double that for container traffic. It’s been effectively closed since November 2023 when the Houthis, a rebel group controlling large swathes of Yemen, started attacking commercial vessels in the southern mouth of the Red Sea, sinking at least four ships, setting ablaze several others and killing several mariners.
The closure forced shipping companies to take the long route around the southern tip of Africa, adding 10 days of sailing time from Asia to Europe and millions of dollars in extra costs. ING Bank NV estimates the detour is currently absorbing around 6% of global fleet capacity due to the longer voyage.
It was the culmination of five chaotic years for the shipping industry, which included the impact of COVID-19, the U.S.-China trade war, the grounding of a huge container ship in the Suez Canal in 2021, and the disruption to Atlantic-Pacific traffic in 2023-2024 due to a drought affecting the Panama Canal.
The Houthi attacks have decreased after the U.S. brokered a ceasefire between Israel and Hamas in Gaza in late September. It’s a fragile respite, but if it holds — a big if — it would allow traffic to resume through the waterways.
Officially, the world’s top shipping companies and the largest commodity traders say the canal route is still closed.
Quietly, however, they are testing the waters, sending single ships, including some of the world’s largest container vessels, up and down the Red Sea to see what happens. So far, the vessels have crossed without problem. The number of vessels crossing the canal hit the highest in more than a year and a half in November, according to data compiled by Bloomberg.
Crucially, some companies are now taking steps that go beyond single-vessel tests and are more akin to a partial reopening.
For the first time in two years, France’s CMA CGM SA, the world’s third-biggest shipping operation, is committing to a regular service from India to the U.S. via the Suez route starting in early 2026. Others are keeping mum about their schedules, but are signaling their wait-and-see stance could change soon.
“If the ceasefire holds, then I think we’ve crossed a gate and made a big step towards returning through the Red Sea,” said Vincent Clerc, CEO of shipping giant AP Moller – Maersk A/S.
The industry has three good reasons to remain cautious, however.
The first is Yemen — and Gaza. The two ongoing conflicts are linked, and the calm in the Red Sea depends on sustaining the peace between Israel and Hamas. If the deal collapses, the Houthis could restart their attacks against vessels.
The second is that shipping companies are eager to avoid so-called double disruption: the risk of returning to the Red Sea too early only to have to switch back again to the long route around Africa if the Houthis renew their terrorism.
That uncertainty calls for testing the Suez route with limited sailings, perhaps for as long as six months, before contemplating a full resumption, industry executives say.
The more likely scenario is that container ships will initially take the long route around Africa when sailing from Asia to Europe fully loaded and keeping to schedules is crucial.
