Major European shipping lines have begun trial sailings through the Suez Canal, raising concerns that increased Asia-Europe capacity could drive down freight rates, reports Seoul's Chosun Biz.
CMA CGM's 18,000-TEU Benjamin Franklin became the first large containership to transit the canal since October 2023, when Houthi attacks forced carriers to reroute via the Cape of Good Hope. Other CMA CGM vessels, including the 17,859-TEU Zheng He and 16,022-TEU Jules Verne, are also scheduled to pass through.
The Suez Canal Authority, which introduced a 15 per cent toll discount in May, said 229 vessels returned last month, the highest since the Red Sea crisis began. Traffic remains well below pre-crisis levels of 70-80 ships daily, with current averages at 30-35.
Industry analysts warn that a full-scale return could sharply increase available capacity on Asia-Europe routes, pushing freight rates lower. Sailing via the canal shortens voyages by up to 10 days compared with the Cape route, reducing ton-miles and boosting throughput.
Rates on Europe routes stood at US$1,323 per TEU on November 7, down 48 per cent from a year earlier. A further decline would hit Korean carrier HMM, which derives 35 per cent of revenue from Europe services.
While risks remain from rebel threats and high insurance costs, officials said stabilization around the canal could encourage more fleets to return, cutting fuel use and emissions but intensifying pressure on freight rates.
https://www.shippingazette.com/news?news_id=9251100000696
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