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Despite Houthi militants claiming they will limit their attacks , carriers remain cautious

By Greg Knowler

Ocean carriers say they will only return to Red Sea transits “ when it is safe to do so ,” despite a Jan . 19 announcement by Yemen ’ s Houthi militants that they will limit their attacks on shipping to Israel-affiliated vessels .

The announcement was made in an email to the Yemen-based Humanitarian Operations Coordination Center ( HOCC ) following the start of a 42-day ceasefire in Gaza between Israel and Hamas , but the ocean carriers ’ position on a return to the Red Sea remains unchanged .

“ We will closely analyze the latest developments and their impact on the security situation in the Red Sea . Otherwise , the following applies unchanged : we will return to the Red Sea when it is sufficiently safe to do so ,” Hapag-Lloyd spokesperson Tim Seifert told the Journal of Commerce Jan . 20 .

Maersk released a similar statement Jan . 20 , calling developments in the region “ positive .”

“ We will return to the Red Sea when it is sufficiently safe to do so .”

“ We will continue monitoring the situation in the Middle East closely and will return to the Red Sea and sailing through Bab al-Mandab when it is safe to do so ,” Maersk noted . “ It is still too early to speculate about timing , but these developments are a needed step in the right direction .”

Houthi attacks on shipping began in November 2023 in support of Hamas after Israel launched its military operations in Gaza . Most commercial vessels have avoided the Suez Canal for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen , forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope . The Houthi rebels in early 2024 said they would only attack Israel-linked vessels , but this was not borne out .

Jack Kennedy , associate director of country risk for the Middle East and North Africa at S & P Global Market Intelligence , parent company of the Journal of Commerce , said there might be a relative decrease in the frequency of attacks against shipping after the ceasefire , but that would likely reflect degradation of Houthi capability after US and Israeli airstrikes .

Flooding capacity

As much as carriers extol the virtues of a return to Red Sea transits , the consensus among analysts is that it will lead to a period of supply chain disruption with ship schedules thrown out , followed by collapsing rates as excess capacity floods the market .

In a report titled Exceptional profits period drawing to a close , investment bank Jefferies noted that , with rates expected to weaken through 2025 , 90 % of container ships typically using the shorter Suez Canal route diverted around Africa last year , removing over 12 % of fleet capacity .

“ Last year was one of the best years ever for the container industry as the sudden removal of this capacity , along with strong trade growth , pushed capacity utilization to an average of 87.5 %,” noted the Jefferies report , well above the 75 % utilization in 2024 had there been no diversions .

“ We expect continued positive earnings for the sector but a repeat of 2024 results seems difficult to achieve . The demand picture over the medium-term remains a major question as tariffs and reciprocal tariffs point to stunted trade growth in the coming years .”

22 Journal of Commerce | February 3 , 2025 www . joc . com