Global container shipping major Maersk has successfully transited the Suez Canal and will implement its first structural change of a service back to the trans-Suez route, which could lead other carriers to resume the shorter route.

Carrier CMA CGM has been gradually switching more of its services to the Suez routing over the past 12 months, according to Lars Jensen, president of consultant Vespucci Maritime.

“With Maersk now permanently switching a service, all carriers will be looking and considering their next moves,” Jensen said. “If conditions remain peaceful it might now be realistic to see a wider scale beginning to a switch-over for more carriers in the period after Lunar New Year.”

While a large-scale return of commercial vessels to the Suez Canal and Red Sea could lead to a surge in excess capacity, the shift could also lead to congested ports and trade lane disruptions that could pressure prices higher for a period of time.

MAERSK: TRANS-SUEZ IS PREFERRED ROUTE
Maersk said the route through the Suez, the Red Sea and the Bab el-Mandeb Strait is the fastest, most sustainable and most efficient way to serve customers with transport between Asia and Europe.

“Since the diversion of the first sailing from the Red Sea route to the Cape of Good Hope route, Maersk has maintained the intent to resume trans-Suez routing when conditions allowed,” the company said.

Maersk said on 15 January that it has decided to implement the first structural change of a service back to the trans-Suez route.

“This applies to the MECL service, allowing Maersk to return to the service pattern originally designed and to provide customers with the most efficient transit times,” the carrier said. “The MECL service is solely operated by Maersk and connects the Middle East and India with the US East Coast.”

Maersk said it successfully sent the Sebarok through the canal in December and followed that with the Denver on 11-12 January.

“The safety of our crew, vessels and cargo remains of utmost importance to us, and the necessary safety measures were applied during transit,” Maersk said.

Customers with cargo on this vessel have been informed directly.

“Assuming that security thresholds continue to be met, we will continue our stepwise approach towards gradually resuming navigation along the east-west corridor via the Suez Canal and the Red Sea,” Maersk said. “There are no additional sailings to announce at this time.”

Market intelligence group Linerlytica said the return to the Suez Canal will have negligible impacts on Cape of Good Hope diversions in the near term.

“The total containership fleet shifted to the Cape route dropped marginally in the last three weeks following CMA CGM’s reassignment of six voyages back to the Suez and a single test voyage by Maersk,” Linerlytica said. “However, the impact on effective supply remains substantially unchanged with 330 voyages representing 6.1% of the fleet still absorbed by the Cape diversions.”

The following chart shows containership capacity absorbed by Cape diversions as a percentage of the global fleet.

Linerlytica said the timetable for a full return to the Suez remains clouded as the current unrest in Iran could trigger an escalation in Middle East tensions that would delay rather than hasten a return of containerships to the Red Sea.

“Depending on the rate and scope of advancement across carrier networks, what unfolds could be a double-edged sword for shippers,” Destine Ozuygur, senior market analyst at ocean and freight rates analytics firm Xeneta, said. “While they may benefit from a downward slide of rates due to an abundance of capacity, the risks to reliability and on-time shipments is a potential shock to be wary of.”

Source: ICIS Focus story by Adam Yanelli