The situation has calmed down in the Middle East. With a high fire on the table it seems that one of the great logistics problems in the world, but in particular of the West, will be resolved soon: the Red Sea and the Suez channel will be transitable again. Although now it seems already something of the past, on October 19, 2023 the world lived a change of enormous proportions in world trade. At that time the attacks of the Houthi rebels of Yemen began to the charges that crossed the Red Sea for the Suez channel as Answer for the Israeli invasion on the Gaza Strip. Consequently, the world’s shipping companies announced that they renounced this route and that they would opt for a complete turn from Asia to Europe bordering Africa.
More than 1 year and four months have passed since this crisis began and, far from going out, it has become the new normality. Now we have become accustomed to a longer days. The channel that concentrated 12% of all world trade in its golden days now continues in low hours. While local and regional maritime traffic continues to travel through this artificial narrow, The income of the Suez channel fell by 60% in 2024. That had a cost of 7,000 million dollars for Egypt, which was already in the midst of its worst financial crisis in decades. Cairo weakened its currency in 40% in March 2024, as part of a global rescue of 57,000 million dollars by the International Monetary Fund and others.
However, with a calmer context, local authorities are rapidly asking the half -world companies to return. With the last attack recorded on December 2, Your transit is considered safe. Thanks to this, not only the income of the channel will flow again, but that all world trade will become cheaper to be able to use a much faster route.
The Suez Canal Authority affirmed a month ago that “the current situation in the Red Sea region is witnessing positive indicators that show that stability returns to the region.” January 19, The hutis promised to stop attacking the ships that pass through the Red Sea, except those with Israel flag or that are exclusive property of Israeli companies or individuals.
However, companies delay the return to this route as much as possible. The reason goes beyond the concern for security. After all this period sailing in a New world of commerce and logistics, The shipping companies believe that a total return to Suez very quickly can unleash a real crisis for their sector and want to do part partially to prevent the huge recruited fleet from becoming an expense of expenses while the price of the freight sinks, destroying its profitability.
“Even if the war ends in the next 60 days, They will need at least three months To normalize supply and demand, “said Yang Ming president, Tsai Fengla Consultant Ming, at a meeting of Chinese shipowners in Taiwan, according to the consulting firm Loadstar.” Any decision to return to the Red Sea will have to be taken by the partners of the Alliance. “In addition, he explains that he would not suffice a stop to the fire, but that the signatures will require a total peace to resume the route.
Even without the threat of any attack, analysts fear that the conjunction of the new ships that are already commissioning with reopening can collapse the price of freight below $ 1,000. Currently the Shanghai Containerized Freight Index, which measures the price of vessels that go from Asia to Europe shows about $ 1,437 per unit. This represents an authentic collapse of 41% in what we have of 2025 and 60% compared to its maximums of 2024, when the traffic crisis triggered prices.
Jérôme de Ricqlès, an expert from UPPLY, comments that only the closure of the Suez Canal is $ 1,000 on fixed costs for freight. For its part, the logistics consultant believes that there has been an excess of optimism with the orders in an authentic war between the giants of the sector for becoming the owners of the sea in this era of great profitability. This has already generated a situation of overcapacity. “The ships commissioned by shipping companies during the years after the pandemic are reaching the market in large numbers, especially on the routes between Asia and Europe. In 2025, this trend will continue, with more than 10 megaport in service in service. Given the provisions of load volume, it will be very difficult to fill them.” This has also gathered with “MSC shooting its ships of ships and an average age of ships increasing.”
From ING they speak in their latest report that the sector can be trapped in a double crisis: uTariffs that limit demand and an oversupply because of Suez who destroys the forecasts. At the moment they point out that the opposite effect is taking place, the firms live a moment of euphoria while the US clients ask in an accelerated way “just before Trump’s tariffs enter into force.”
From then on “winds against protectionists are expected to slow down the container trade.” According to the Dutch firm “the global compound index of containers (CCFI) remained raised for 2024 because the diversion of the route around the Cape of Good Hope lasted more than expected, which consumed up to 10 % additional capacity and caused constant delays and congestions.”
The ‘trick’ of contracts
Now with reopening they bet on a slow process but sure in which “prices return to reality.” In that sense they point out that we will see a roof of $ 2,500, the freight, the figures prior to the pandemic. However, Rico Luman, ING analyst indicates that companies will not notice this dynamic until the end of 2025. “Approximately half of the world volume of containers is hired to shipping companies, usually in contracts of one or two years, but also six months given the current uncertainty. It is likely that there are most of the gains of shipping companies in 2025”.
In short, contracts for The shipping companies will continue to reflect prices in the ‘spot‘. In fact, they indicate that Maersk, the largest firm in the world, has indicated that they have increased their businesses with 60% contracts by 2025 to current 70%. In this way they have reduced their exposure to the daily market and these contracts to one year seen have 27% higher in cash prices, which have collapsed.
From Fitch they agreed in their latest sector report. In the same the rating agency claimed that “World maritime transport benefited in 2024 From the continuation of existing conflicts (for example, the oil tankers of the Ukraine War) and the appearance of new situations (the interruption of maritime transport of containers in the Red Sea) “. In that sense” the reduction of geopolitical risks can normalize the high freight rates, although this is probable that this will take some time after any dispute resolution. “
“Shipping companies face an increase in their costs, but excess mass capacity and intense competition will make them difficult to transfer this to prices”
This is what is allowing the main companies in the sector to live good moment in the park even though they have this threat of overcapacity over their heads. The MSCI World Marine Index is revalued by 6% so far this year and is maintained practically flat compared to 2024. For its part, the sector has lived a stock market revolution since 2020, before the pandemic, shooting 170%. Maersk, the leading firm rises by 7.24% so far this year. On the other hand, the German Hapag-Lloyd does 5.75% while Evergreen go back but does only 1.1%. All previously mentioned experience 10% increases in the last 12 months and 40% in the case of Maersk.
From Fitch they point out that the big problem comes from Trump’s tariffs. “The changes in commercial policy, Particularly probable after the results of the US elections of 2024, they have a visible risk in 2025 that could reduce the demand for shipping companies. ” undeniable that shipping companies face an increase in their operational costs, but the excess mass capacity and intense competition will make them difficult to transfer these additional costs through higher freight rates. “
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