French shipping group to step up trips through key Red Sea route

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

French container shipping group CMA CGM is planning more journeys through the Suez Canal, as commercial vessels weigh a return to the Red Sea after Yemen’s Houthi rebels last month signalled a halt to their strikes in the region.

CMA CGM’s India America Express will travel through the Suez Canal on outbound and return trips between India and Pakistan and the US east coast, according to a schedule published on the company’s website. The first ship will depart from Karachi next month after the French group avoided making return journeys for months.

Container shipping companies, which have largely avoided the Suez Canal over the past two years, are considering a return to the key trade route after the Houthis last month indicated that they would end their campaign following a ceasefire in Gaza that went into effect in October.

“Until now, these transits via [the] Suez Canal have been on a case-by-case basis,” said Peter Sand, chief analyst at maritime intelligence group Xeneta. “What makes this special is that CMA CGM are committing the Indamex service fully” for both outbound and return journeys through the canal, he added.

CMA CGM declined to comment.

In November, transits through the Bab-el-Mandeb strait, which links the Red Sea with the Gulf of Aden and the Indian Ocean, hit their highest level in two years, according to Lloyd’s List Intelligence, though the number of trips remained at half the level of October 2023, when the Houthis began striking vessels in the Red Sea after Hamas attacked Israel.

Roughly a tenth of global seaborne trade volumes passed through the Red Sea shipping route before the Houthi campaign, according to Clarksons Research. Many ships have been forced to sail around the southern tip of Africa, adding weeks to journey times and pushing up shipping prices.

Groups such as CMA CGM, which owns one of the world’s largest fleets of commercial container ships, have continued to send a small number of vessels through the Red Sea, but with the support of naval escorts.

Those ships from Europe have tended to carry less cargo than the fully laden ships from Asia, according to experts.

However, maritime analysts cautioned that CMA CGM’s shift did not necessarily indicate the shipping sector’s full-scale return to the Red Sea. “This comes down to individual companies’ risk tolerance,” said Martin Kelly, head of advisory at maritime security group EOS Risk. “Some will see there haven’t been hostilities for weeks now, whereas others will see the situation as too fragile to return.”

Dylan Mortimer, a broker of war insurance for ships at Marsh, told the Financial Times that war risk insurance rates for the Red Sea had fallen about 70 per cent compared with prices at the peak of tensions in mid-2024.

However, rates had begun to plateau, and for prices to fall further, “a sustained period of stability” would be essential, said Marcus Baker, head of marine and cargo at Marsh.

Maersk, the world’s second-largest container shipping line, and Hapag-Lloyd, which together operate the Gemini shipping alliance, are taking a more cautious approach.

Vincent Clerc, chief executive of Maersk, told the FT that any return to the Red Sea would be “gradual”.

The Danish group is conducting a security review on passage through the Red Sea and the Suez Canal, and Clerc hailed the progress of peace talks on Gaza.

But he cautioned that a return to the route was not “imminent” and that his customers did not want to “flip-flop” between the Red Sea and the longer route via the Cape of Good Hope as this would play havoc with their supply chains.

He also warned that a hurried return would cause huge disruption at ports in Europe. 

“Operationally, getting everything through at once would be hugely disruptive to landside infrastructure in Europe . . . It would create significant congestion and delays,” he added. 

Hapag-Lloyd chief Rolf Habben Jansen said, on a call to customers last week, that any Red Sea return would be “phased” and likely to take place over “a transition period of 60 to 90 days”.

Additional reporting by Richard Milne in Oslo