Is the Red Sea crisis really over?Global freight rates may face the risk of plummeting
- Author:weiyun.com
- Source:weiyun.com
- Release Date:2025-11-13
The Houthis have officially announced the suspension of military operations in the Red Sea.The war is suspended!Houthis say they will resume attacks if ceasefire breaks down in Gaza!However, while confirming the temporary ceasefire, Madani, the Houthi armed chief of general staff, added that if the conflict in Gaza continues, the Houthi armed forces will consider resuming operations and re-impose blockade pressure on Israeli shipping routes.
The Houthis had fulfilled their ceasefire commitments in early 2025, but when the war in Gaza resumed, the organization immediately resumed maritime attacks.
In this regard, many foreign professional analysts have said that the ceasefire is not a signal that shipping companies will return to the Red Sea routes. The shipping traffic situation in the Red Sea region will not improve immediately, and there are still many uncertainties.
In addition, the latest estimates from Clarksons Research show that due to the impact of ships continuing to circumnavigate the Cape of Good Hope, the current demand for shipping turnover of all types of ships has increased to varying degrees.
Among them, container ships had the highest growth rate, reaching 10.7%; followed by car carriers (up 6.8%), liquefied natural gas carriers (up 5.4%), chemical carriers (up 1.8%), dry bulk carriers (up 1.1%), crude oil carriers (up 0.8%), and product oil carriers' growth rate was less than 0.5%.
If ships return to the Red Sea route on a large scale, the transportation workload of container ships will be significantly reduced, which may lead to a collapse of freight rates due to "overcapacity".Unless shipping companies take radical measures such as idling ships, scrapping old ships, sailing at low speeds, and suspending large-scale sailings, it will be difficult to reverse the situation.
Peter Sand, chief analyst at Xeneta, pointed out that since the beginning of 2025, the average freight rate for the three routes from the Far East to Northern Europe, the Mediterranean, and the East Coast of the United States that originally required passing through the Red Sea has dropped by more than 50%.
He warned: "Currently shipping companies have gradually fallen into a state of loss. Even if the situation in the Red Sea does not worsen, it is expected that global freight rates may continue to fall by up to 25% in 2026."
A large-scale resumption of the Suez to Red Sea route may not happen in the near future, so shipping lines will need to choose carefully before being sure that the Red Sea route is safe and reliable for the foreseeable future, not just the next few weeks.
The Houthis had fulfilled their ceasefire commitments in early 2025, but when the war in Gaza resumed, the organization immediately resumed maritime attacks.
In this regard, many foreign professional analysts have said that the ceasefire is not a signal that shipping companies will return to the Red Sea routes. The shipping traffic situation in the Red Sea region will not improve immediately, and there are still many uncertainties.
In addition, the latest estimates from Clarksons Research show that due to the impact of ships continuing to circumnavigate the Cape of Good Hope, the current demand for shipping turnover of all types of ships has increased to varying degrees.
Among them, container ships had the highest growth rate, reaching 10.7%; followed by car carriers (up 6.8%), liquefied natural gas carriers (up 5.4%), chemical carriers (up 1.8%), dry bulk carriers (up 1.1%), crude oil carriers (up 0.8%), and product oil carriers' growth rate was less than 0.5%.
If ships return to the Red Sea route on a large scale, the transportation workload of container ships will be significantly reduced, which may lead to a collapse of freight rates due to "overcapacity".Unless shipping companies take radical measures such as idling ships, scrapping old ships, sailing at low speeds, and suspending large-scale sailings, it will be difficult to reverse the situation.
Peter Sand, chief analyst at Xeneta, pointed out that since the beginning of 2025, the average freight rate for the three routes from the Far East to Northern Europe, the Mediterranean, and the East Coast of the United States that originally required passing through the Red Sea has dropped by more than 50%.
He warned: "Currently shipping companies have gradually fallen into a state of loss. Even if the situation in the Red Sea does not worsen, it is expected that global freight rates may continue to fall by up to 25% in 2026."
A large-scale resumption of the Suez to Red Sea route may not happen in the near future, so shipping lines will need to choose carefully before being sure that the Red Sea route is safe and reliable for the foreseeable future, not just the next few weeks.