A Red Sea return would be a game changer for container shipping in 2026
Red Sea shipping refers to the crucial trade route connecting Europe and Asia via the Suez Canal, vital for global commerce, but currently experiencing major disruption due to Houthi rebel attacks from Yemen since late 2023.
Their actions have forced most carriers to reroute ships around Africa’s Cape of Good Hope, which increases transit times, costs, and creates supply chain volatility. However, some potential reopening discussions are emerging.
AP Moller-Maersk has completed a second transit through the Red Sea in a further sign of normalising liner services. The Danish carrier said the passage was successfully completed on 11-12 January by the US-flagged, 6,478-teu Maersk Denver (built 2007). It is only the second Maersk vessel to complete a transit through the Bab el-Mandeb Strait and into the Red Sea in just over two years. Very few others have made this ancient trade route with most freight companies not ready to take the risk.
Container lines deciding to navigate back to the Red Sea is arguably the most important development to watch for in the global shipping market this year. And it’s not a matter of ‘if’, but ‘when’. And should one big company decide it’s worth the risk, others will surely follow. The Suez Canal has been a vital link for modern East–West trade for decades, handling over 15% of global goods trade and up to twice that share of global container traffic, particularly consumer goods.
Detouring around the Cape of Good Hope has been common practice for most container vessels for nearly two years, following Houthi attacks in the Red Sea region that began in late 2023. This unprecedented avoidance lasted far longer than expected, triggering a rebound in container rates and liner profit margins after their sharp decline from elevated pandemic levels in 2023.
Resuming Red Sea transit saves more than 3,000 nautical miles and roughly 10 days of sailing on the Asia–Northwest Europe route. Over time, this will significantly free up vessel capacity, as the detour currently absorbs around 6% of global fleet capacity on top of frequent delays. That’s why a return will make waves, just as the massive diversion initially did. Following the Gaza ceasefire deal in October, liner companies such as Maersk and Hapag-Lloyd no longer rule out returning to the Red Sea and have indicated they will do so as soon as conditions allow. CMA CGM, which continued some services under naval escort, also expects to resume transits shortly. Read more from ING THINK >
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Back in 1836, Thomas Meadows and Company Limited of London, began to see the need for this industry following the demand created by more reliable rail transport and steamships. Trade was increasing to Europe and North America in particular. In fact the first freight forwarders were London innkeepers who forwarded on the luggage of their hotel guests!
BIFA – The leading body representing the UK International Freight Services industry.
Members of BIFA are organisations engaged in the movement of freight to/from the UK by all modes of transport: air, road, sea and rail. Some members also provide customs clearance and other cross border services.
Currently, low value imports – goods with a value of £135 or less being imported into the UK – can claim a customs duty relief. VAT is due on these goods following reforms in 2021. Goods worth more than £135 can incur a duty of up to 25%.