Amid a global supply chain wracked by geopolitical strife, trade wars and parochial upheavals, the prospective return of the world’s largest container operators to the Red Sea-Suez Canal route is good news for most of the Middle East, but could signal leaner times for ocean transport providers, an analyst says.
“The opening of the Red Sea will lead to a drop in container [purchase] prices and freight rates and a massive surge in container availability, putting pressure on NVOCC [non-vessel operating common carriers] in that region,” said Christian Roeloffs, chief executive of marketplace Container XChange, in a March forecast.
The biggest container carriers have diverted services away from the Suez Canal-Red Sea-Gulf of Aden route since early 2024. That was shortly after the start of the Gaza war, when Iran-backed Houthi rebels in Yemen attacked merchant shipping they claimed was linked to Israel.
While Israel and Hamas work through a multiphase ceasefire agreement, shipping executives have said the region is still too unstable to guarantee the safety of ships and their crews.
The United States on Wednesday sanctioned Houthi leaders they say conspired with Russia to import arms into Yemen and supplied Yemeni fighters for the war with Ukraine. The U.S. also said the Houthis provided safe passage for Russian and Chinese ships through the Red Sea. The sanctions came one day after the U.S. re-declared the rebels a foreign terrorist organization.
Roeloffs said the return of one carrier to the Red Sea is likely to set off a domino effect, with other carriers to follow. Notably, CMA CGM of France continued to operate scheduled Red Sea services throughout the attacks — often under military escort.
Until then, Roeloffs said logistics providers will play a guessing game with rates and capacity, though not without some new opportunity.
“As supply continues to rise while cargo demand softens, downward pressure on prices is becoming a major challenge,” he said. “Freight rate instability could further increase financial risks for smaller operators. However, shifting trade patterns are also creating new container leasing opportunities, particularly in Southeast Asia and Latin America, where demand is rising amid evolving global supply chains.”
As of Tuesday, average prices for 40-foot high-cube cargo-worthy containers on the Container xChange platform had increased in Europe, Central and Southeast Asia, Latin America west, and Southern Africa. Prices have generally declined across North America, the Middle East, the Indian Subcontinent, northeast Asia and East Africa.
Businesses were advised by participants in a recent webinar hosted by ContainerXChange to stay agile and avoid long-term commitments.
“Uncertainty is toxic for trade, and businesses today are overwhelmed by shifting regulations, unpredictable tariffs and constantly changing trade dynamics,” said Peter Sand, chief analyst, Xeneta. “The best advice? Stay calm, keep your options open, and avoid locking into long-term commitments without a clear upside.
“The rules of global trade seem to change overnight, making flexibility and real-time insights more critical than ever. Instead of reacting to trade obstacles, businesses should focus on data-driven decision-making, risk management and adaptable logistics strategies to navigate an increasingly volatile market.”
Recent moves by the Trump administration to punish China with import tariffs and onerous port fees are forcing shippers to realign supply chain strategies to accommodate longer-term shifts in demand.
“The uncertainty around tariffs is creating ripple effects across the entire container logistics ecosystem,” said Amanda Marr, chief executive, Hysun Containers, on the webinar. “We’re already seeing enhanced efforts to reroute cargo through alternative markets like the Middle East, Indian Subcontinent and Southeast Asia.”
Those realignments are giving rise to new NVOCC services, boosting demand for containers in Southeast Asia and Latin America.
“Smaller and more agile players have an opportunity to gain market share as trade routes diversify,” said Chief Executive Andrea Monti of Sogese, a container provider in Livorno, Italy.
The cost of tariffs will be an inflationary trigger mostly passed on to consumers, the experts said, with fluctuations in short-term freight rates and vessel capacity adding to market instability.
“Long-term contract rates for trade lanes from China and the Far East to the U.S. East and West coasts have been declining for the past four months,” said Xeneta’s Sand. “While rates remain significantly higher than pre-Red Sea-crisis levels, we’re seeing a clear trend — shippers and forwarders are signing contracts at lower levels compared to the peak in the third quarter last year.”
A proposal by the U.S. to charge port fees of as much as $1.5 million for Chinese-built vessels is expected to disrupt global shipping and increase costs for carriers.
“The proposal will have a far-reaching impact, as every top-six carrier in the world has at least 20% of its active fleet built in China, and 40% of its order book tied to Chinese shipyards,” Sands said. “This isn’t just a hit to individual carriers; it’s a challenge to globalization and free competition. Now, more than ever, businesses must base their decisions on real insights, not speculation.”
Find more articles by Stuart Chirls here.
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