Reduced risk in the Red Sea and the subsequent interest by container vessels to return to the Suez Canal for East-West sailings could have a profound effect on the liner trade’s fleet capacity and declining freight rates.
According to Peter Sand, chief analyst at sea intelligence platform, Xeneta, it is estimated that 2.5 million TEU could be stripped out of demand by voyage resumption through the Suez Canal.
Although he has repeatedly cautioned against hasty re-routing through the risk-prone shorter passage between Europe and Asia, it’s a fait accompli that there will be a maritime reset in 2026.
In an interview with Freight News on Wednesday, he said: “We are all aware, including the carriers, forwarders and shippers, that something’s got to give upon a return to the Red Sea.”
Given that demand has grown steadily since 2024, going from 6.5% to 7% year-on-year (y-o-y), and projected to hold steady at 3% for the rest of the year, a sizeable dent on capacity is expected to weight even heavier on freight rates.
Earlier this week, Nigel Pusey, CEO of Container Trades Statistics, said freight rates were 18% down y-o-y in the last quarter of 2025, and it was looking as if it was continuing on its downward trajectory in Q1 of 2026.
Rates for forty-foot boxes are also trending south.
Data for early February from Drewry World Container Index stands at USD$1 959-$2 000 per FEU, down 7% week-on-week.
The consultancy has said it reflects a prolonged decline from 2025 highs amid overcapacity and soft demand.
Freightos Baltic Index (FBX) similarly shows a 23% monthly drop, with spot rates 30-55% below peaks last recorded in 2022.
Shipping analyst Alexandros Itimoudis points to a deep concern within the industry.
Writing for Container News, he argues that deceleration in maritime volume has been a long time coming.
“For four decades, the math was simple. Global containerised seaborne trade grew from 0.1 billion tonnes in 1980 to 2.2 billion by 2023. Fleet capacity expanded twenty-five-fold. Trans-Pacific routes alone moved 30 million TEU annually. The world’s goods flowed through predictable arteries, and shipping prospered by optimising them relentlessly.
“That equation no longer holds.”
Adding to the current narrative for freight rates, is the global container fleet’s bulging order book.
Shipping Intelligence Hub confirms container fleet capacity will grow 3.6-5% in 2026, as 1.7 million TEU of newbuild capacity are expected to come online, outpacing 3% demand growth.
“The order book has reached a record 10 million TEU (33% of active fleet)” – the highest amount of newbuilds coming through since 2010.”
And yet, “scrapping activity has collapsed to just five vessels in the first seven months of 2025, creating structural oversupply that favours shippers,” the Hub reports.
All considered, current conditions could result in “a meltdown for the market” if there’s an eventual return to the Red Sea, Sand says.
He mentioned that the industry was already seeing how once-profitable lines like Maersk, had posted negative numbers for its ocean component.
Earlier this week it was reported that a127% decline between Q3 and Q4 marked Maersk’s end-of-year ocean results for 2025, from $567 million to $153 million in earnings before interest and tax.
As a result, the Danish carrier has indicated its intention to cut about 1 000 jobs, totalling 15% of its corporate functions.
“Carriers are feeling the brunt of elevated costs,” Sand says, “in particular from charters.”
- This is just one segment from a much broader conversation.
