Red Sea: caution is the watchword

This effectively signals the end to Red Sea attacks on shipping which up until the point of the announcement had killed at least nine seafarers and sank four ships.

The Suez Canal Authority has promoted the story of an end to the conflict citing as evidence the recent passage of the 17,859TEU capacity CMA CGM Benjamin Franklin through the Canal sailing from Europe to Asia and which then passed unimpeded through the Bab el-Mandeb Strait at the southern end of the Red Sea. Indeed, it is fair to say that CMA CGM has been something of a pioneer in this respect with other vessels following in the footsteps of the Banjamin Franklin and making use of the Canal. Indeed, CMA CGM’s boldness in this respect goes as far back as June, during the conflict time, when the 15,536TEU capacity CMA CGM Osiris achieved the status of being the largest vessel to pass through the Canal for over a year.

Generally, however, while transits have definitely picked up there is no mad rush to use the Suez Canal.

Caution is the watchword!

Certainly, this seems to be the path to follow according to shipping consultants and online shipping analysts.

“Details are sketchy and you cannot base the safety of crews, ships and cargo on the word of Houthi militia,” says Peter Sand, Chief Analyst at Xeneta. Carriers need far more assurance than that and, perhaps more importantly, so do insurers.”

Perhaps even more tellingly there are economics to take into account. Xeneta underlines that a mass return to using the Canal could trigger a seismic drop in freight rates with more than two million TEU of capacity absorbed by the longer alternative route round the Cape of Good Hope.

Bottom line there is also the warning from the Houthis that if the conflict in Gaza resumes then there is the possibility of a resumption of hostilities.

Caution definitely seems the best policy!