Shipping groups Maersk and Hapag-Lloyd will resume some sailings through the Suez Canal under their Gemini joint network, Maersk said on Monday, hitting shares of both companies because of the potential impact on freight rates.
The Asia-Europe trade corridor through the Suez Canal was abandoned by most shippers after attacks in the Red Sea by Yemen's Houthis. That forced them to take the much longer trip around Africa's Cape of Good Hope, but shipping companies are now considering a return to the Red Sea route.
"This joint decision with Hapag-Lloyd comes after thorough assessments of the security situation in the Red Sea area and marks a step towards a gradual return to the trans-Suez corridor," Maersk's statement said.
Changes to the AE15 service, which connects Asia, the Mediterranean and Europe, will reduce the duration of the passage by four weeks, a Hapag-Lloyd spokesperson said.
FASTEST ROUTE BETWEEN EUROPE AND ASIA
The route through the Suez Canal and the Red Sea is the fastest linking Europe and Asia and accounted for 10% of global seaborne trade until the attacks began, data from Clarksons Research show.
The longer journeys around Africa drove up shipping rates, making freight more expensive.
Maersk and Hapag-Lloyd do not have plans to change any other Gemini services, Maersk said, adding that they would continue to monitor the situation in the Middle East.
"Any alteration to services within the Gemini Cooperation will remain dependent on the ongoing stability in the Red Sea area and absence of any escalation in conflicts in the region," the company added.
Shares in Maersk and Hapag-Lloyd were down 5.8% and 2.7% respectively at 1251 GMT.
"We view this as the first step that will pave the way for a full return to the Red Sea by the end of this year," Jyske Bank analyst Haider Anjum said in a note to clients.
"A full return, and thus more efficient capacity management, combined with the prospect of new ships being delivered in 2027 and 2028, should put pressure on freight rates and, consequently, on shipping companies' earnings."
Maersk and Hapag-Lloyd resumed their joint ME11 service — connecting India and the Middle East with the Mediterranean through the Suez Canal — in mid-February, with ships sailing under naval escort.
However, Red Sea transits were suspended in late February after the outbreak of the Iran war, Maersk said in a separate emailed statement on Monday.
(Reuters)