CMA-CGM officially announced on 20th Jan on adjusting three routes away from the Suez Canal to the Cape of Good Hope when the risks of Middle East are increasing, which will influence their transit time and costs.
Three service routes – FAL 1, FAL 3, and MEX – will be rerouted away from the Suez Canal and back to a lengthier route via the Cape of Good Hope, according to a statement released by CMA-CGM headquarters. Last year, these routes were some of the first to return to Suez. The corporation justified the additional changes by pointing to the complicated and unpredictable global environment.
CMA-CGM’s move comes after Maersk last week adjusted its MECL route. This decision therefore undermines the expectations of analysts of potential signal on widespread return to Suez. Those concludes came up due to the cautiousness of Maersk is the highest among major container shipping companies.
After vessels were redirected around southern Africa in late 2023 due to attacks in the Red Sea by Yemeni Houthi rebels, who said they were motivated by the conflict in Gaza and the suffering of Palestinians, shipping corporations have been considering a return to the vital Asia-Europe commerce corridor. But during the last ten days, tensions in the Middle East have increased as the US and Iran have become more aggressive in their rhetoric. Iran has issued a warning that any strike by the US might result in commercial boats being targeted. Tehran has also been identified as a significant intelligence and equipment supporter to the Houthis.
According to Philip Damas, CEO of Drewry, one of the most important decisions this year will be whether to go back to or avoid the Suez route, which will have a direct effect on fleet capacity, freight prices, journey times, and fuel consumption. Choosing longer routes demonstrates maritime corporations’ goals for risk management given the continued hazards.
