Red Sea Return Speculation Unsettles Freight Rate Outlook

Container shipping operators confronted mounting uncertainty regarding potential Red Sea transit restoration following recent ceasefire developments, whilst spot freight rates experienced divergent trajectories across major East-West trades amid persistent overcapacity pressures.

Drewry's World Container Index declined 2% to $1,806 per forty-foot container during week ending 27 November, driven primarily by continued transpacific weakness. Shanghai-Los Angeles rates fell 4% to $2,089, whilst Shanghai-New York declined 6% to $2,735. Rates compressed for third consecutive week despite carriers' November general rate increases rescuing prices from two-year lows during October. Daily spot prices plummeted over 20% week-on-week to approximately $2,100 per FEU westbound, erasing November gains.

Asia-Europe corridor demonstrated greater stability after six consecutive weekly increases. Shanghai-Rotterdam rates decreased merely 1% to $2,165, whilst Shanghai-Genoa fell 1% to $2,300. Carriers implementing higher freight-all-kinds rates ranging $3,100-$4,000 per container effective 1 December, strategically timed ahead annual contract negotiation season. Belgian national strike disrupted Port of Antwerp operations, increasing congestion concerns.

Red Sea transit restoration prospects complicated rate outlook significantly. Suez Canal Authority Chairman Osama Rabie announced 25 November that major container carriers would commence gradual canal return following Sharm El-Sheikh Peace Summit contributions toward regional stability. CMA CGM vessels Benjamin Franklin and Zheng He completed November transits, marking initial tentative returns after extensive Cape of Good Hope diversions spanning nearly two years.

Maersk CEO Vincent Clerc expressed cautious optimism whilst emphasising freedom of navigation criticality. However, widespread carrier scepticism persisted regarding immediate large-scale restoration. Xeneta chief analyst Peter Sand noted "different carriers have different tolerances to risk," predicting gradual transit increases rather than immediate return to 2023 levels. Danish Ambassador Lars Bo Møller confirmed Maersk carefully monitoring security conditions before full resumption.

Industry observers warned potential return could trigger severe disruptions. Sudden capacity injection from shortened routing—saving seven-to-ten days versus Cape routing—would create vessel bunching and European port congestion lasting potentially two-to-six months whilst simultaneously pressuring rates downward through artificial capacity surplus.