The uncertainty surrounding the return of containerships from the Cape route continues to rile the market with freight futures rallying over the past week after CMA CGM signalled to its rivals against an early return to the Suez that could drag down freight rates that are already under downward pressure. The SCFI dropped by 7.4% last week with further declines expected ahead of the Chinese New Year as carriers eager to build cargo roll pools start to slash rates more aggressively before the holidays.
Even if a further escalation in Middle East tensions results in a delay in the return to the Suez, it may not be sufficient to arrest the rate decline as rates are expected to remain weak after the holidays in the Far East. The benchmark April 2026 EC freight futures is trading at a 35% discount to the latest SCFIS index from Shanghai to North Europe even after last week’s futures market rally with freight rates expected to remain below current levels for the rest of this year.
Johnson Leung
CMA CGM still planning return to Suez despite security concerns
CMA CGM is still using the Suez route on the FAL1 for 2 more eastbound sailings on 31 January and 1 February, with regular Suez transits still scheduled to resume from 6 April after a 8 week hiatus. CMA CGM will also retain Suez transits in both directions on the India America Express (Indamex) and the Phoenician Express (BEX2) despite its announcement on 20 January to reroute 3 services to the Cape due to security concerns. If all the ships on the Cape route returns to the Suez, it would release up to 2m TEU of vessel capacity currently absorbed by the longer route.
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