Maersk's Suez Pivot: A Structural Shift or a Tactical Test?

The first major container service to permanently resume trans-Suez routing is now operational. A.P. Moller–Maersk has confirmed the launch of its Middle East–India–U.S. East Coast (MECL) service, with the first scheduled sailing departing Jebel Ali on January 15. This marks a landmark shift, representing the most significant step yet toward restoring traffic through a corridor largely abandoned since late 2023.

The immediate financial rationale is clear. The two-year detour around Africa's Cape of Good Hope added 10-14 days to Asia-Europe transit times and absorbed an estimated 6% of global fleet capacity just to maintain existing service levels. The costs were substantial, with fuel and insurance expenses spiking for the longer route. By returning to the Suez, Maersk aims to reclaim those lost days and reduce the premium paid for the detour.

Yet this is not a full-scale reversion. Maersk is taking a stepwise approach, contingent on continued stability. The company has explicitly stated there are no additional sailings to announce at this time. This cautious stance contrasts with some competitors; CMA CGM, for instance, has committed to regular India-Mediterranean services via Suez starting this month. Maersk's move is a targeted test, using its MECL service as a pilot to gauge the viability of the route before any broader network changes.

The setup is one of calculated risk. The company's own trials with the Maersk Sebarok and Maersk Denver in recent weeks have gone without incident, and the broader security environment has improved since a Gaza ceasefire took effect in October. But the company maintains contingency plans, and the decision to proceed is framed as a response to continued stability in the Red Sea. For now, the MECL service is a structural return, but it is a limited one, signaling a cautious bet on a return to normalcy.

The Freight Rate Shock: Supply Overhang Meets Demand Slowdown

The return to the Suez is a structural shift, but its financial impact will be a shock to the market. A full normalization of traffic is estimated to release roughly 6% of global fleet capacity back into the market. This sudden influx of supply, combined with new vessel deliveries, creates a major overhang. The result is a clear trajectory for freight rates: downward pressure is building.

The benefit, however, is not shared equally. Carriers that have already committed capital to the Suez route-like Maersk with its MECL service-will capture the savings from shorter, cheaper voyages. Their costs will fall as they reclaim the 10-14 days of transit time and the premium fuel and insurance bills of the detour. For those reliant on the Cape of Good Hope, the situation is more precarious. Their vessels remain deployed on the longer route, incurring stranded costs and facing a market where the competitive advantage is shifting. This creates a two-tier industry, where early adopters gain an edge while others struggle with legacy inefficiencies.

The transition itself will be phased to manage this shock. Carriers are likely delaying a full return until after major Asian holidays to minimize network disruption. As one analysis notes, a phased approach, potentially starting after Chinese New Year or during Golden Week (October), is the most probable path. This staggered return is critical. If all vessels that took the Cape detour suddenly converged with those returning via Suez, it would cause massive port congestion. The risk is a repeat of the "inventory whiplash" seen during the pandemic, where a sudden influx of goods overwhelms distribution networks. The market is braced for volatility, but the scale of the disruption will depend entirely on the speed of this transition.

The bottom line is one of painful adjustment. The Suez is reopening, but the market must absorb a significant supply shock. For now, the cautious, stepwise approach by Maersk and others is the smart play, buying time to navigate this supply overhang without triggering a rate collapse.

The Industry Context: A Slow and Selective Rebound

The return to the Suez is not a full recovery, but a slow and selective rebound. While Maersk's MECL service marks a significant step, overall traffic remains depressed. According to BIMCO's chief analyst, container transits in early 2026 are still 60% below the corresponding week in 2023 before the detour began. This stark figure underscores that the market is in a state of partial normalization, not a return to pre-crisis levels.

The recovery is also highly selective. The clearest signs of a return are coming from the largest vessels. In the week ending January 11, CMA CGM, APL and MSC pushed five ships larger than 8,000 TEU through Suez, a notable increase from the week before. This suggests that the economic incentive to reclaim the 10-14 days of transit time is strongest for the most efficient, high-capacity ships. Smaller regional operators, which often have more flexible and lower-cost networks, never fully abandoned the route and remain active. The selective nature of the return highlights a bifurcated market, where the decision to revert is driven by vessel size, route economics, and risk tolerance.

The primary catalyst for this cautious re-engagement is the significant reduction in financial risk. War risk premiums for Red Sea transits have fallen to their lowest levels since the conflict began, now around 0.2% of hull value. This is a dramatic drop from the 0.5% premium seen before the Israel-Hamas ceasefire in early October. As one insurance expert noted, this de-escalation has made the operational risk for ships without Israel exposure "tolerable". The falling premiums directly lower the cost of sailing through the canal, making the Suez more competitive with the Cape of Good Hope route.

Yet the rebound remains fragile. The industry is hedging its bets, with traffic around the Cape of Good Hope surging to 203 voyages in the same week that saw a modest uptick in Suez transits. This divergence shows that most carriers remain unconvinced that the danger has truly passed. The security situation is viewed as a temporary pause, not a permanent resolution. For now, the selective return is a function of economics meeting a lowered, but still-present, risk premium. The full normalization of traffic will depend on whether that premium stays low and whether the security truce holds.

Catalysts and Risks: The Fragile Equilibrium

The structural return to the Suez is now a reality, but its sustainability hinges on a narrow set of forward-looking events. The immediate catalyst is the security situation in the Red Sea. Any resumption of Houthi attacks would force a rapid reversal of the Suez return, as Maersk itself has stated its contingency plans are in place should conditions deteriorate. The company's stepwise approach is predicated on continued stability in the Red Sea, making the absence of escalation the most critical near-term variable.

A second key watchpoint is the pace of adoption by other major carriers. Maersk is not alone in testing the waters, but its cautious, limited rollout contrasts with a more aggressive stance from some peers. CMA CGM, for instance, has committed to regular India-to-US services via Suez starting in January. The broader industry's willingness to follow suit will determine if this is a sustained pivot or remains a niche test. A coordinated, phased return by the largest players would validate the economic case and help manage the supply shock. A slow, fragmented adoption would prolong the two-tier market and keep the risk premium elevated.

The primary operational risk, however, is not security but infrastructure. The market is braced for a massive port congestion as vessels returning via the Suez converge with those still on the Cape of Good Hope route. This "inventory whiplash" could overwhelm terminal and rail networks, negating the time savings that made the Suez attractive in the first place. The risk is a repeat of pandemic-era disruptions, where a sudden influx of goods overwhelms distribution. The industry's phased approach is designed to mitigate this, but the sheer scale of the return-effectively releasing roughly 6% of global fleet capacity-means even a moderate surge in Suez traffic could trigger a crisis at key ports.

The bottom line is a fragile equilibrium. The return is a structural shift, but its success depends on a stable security truce, a synchronized industry response, and the ability of global ports to absorb a sudden influx of cargo. Any failure on these fronts could quickly unravel the gains.