Maersk, the world's second-largest shipping group, has increased the use of the shorter Suez Canal route from Asia to Europe due to global transportation market constraints. This change comes especially as port traffic and shifts in trade flows have significantly impacted the market.
Adapting Transportation Systems to Middle Eastern Disruptions
Patrick Hore, head of the global chemicals division at Maersk, announced at the annual conference of the European Chemical Distribution Association (Fecc) that the global container transportation system has responded to the disruptions in the Red Sea and the Strait of Hormuz. Hore added that currently, six major services between Asia and Europe pass through the Suez Canal, helping to reduce transit times and CO2 emissions.
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Hore pointed out that Maersk was one of the first container groups to return to the Suez Canal route, a route that had become inaccessible for many logistics groups since the onset of Houthi attacks in late 2023. This move is likely to reduce the cost and transit time of chemicals from China and other parts of Asia to Europe.
Optimizing Capacity Use and Existing Challenges
Despite weak or stable demand, Hore noted that global container capacity is being heavily utilized as delays in the system absorb ships and containers. Maersk is currently operating at about 96% of its capacity, not due to increased demand, but because of slow cargo movements through ports and distribution in inland areas.
Hore stated that using the Red Sea route and the Suez Canal could help free up capacity by reducing travel times, but it may create short-term traffic in Europe as ships passing through the Suez Canal encounter slower vessels coming via Cape of Good Hope.
With increased traffic around Cape of Good Hope since the onset of Houthi attacks, logistical issues in inland networks and ports have also been structurally identified. Hore pointed to a shortage of truck drivers, rail capacity constraints, and disruptions caused by infrastructure upgrades in Europe.
He also mentioned the need for investment in terminals and ground logistics to manage bottlenecks and improve reliability. Low water levels in the Rhine River, Danube, Panama Canal, and the Manaus region in Brazil have led to decreased efficiency and increased supply chain costs.
Maersk is investing in terminal capacity on both sides of the Panama Canal and in adjacent railways to maintain more options. Hore emphasized that maintaining supply chains and ensuring normal market operations, even at higher costs, is of utmost importance.
In 2025, the market expected an increase in capacity as many new ships were set to be brought into service. Hore noted that new ships have been absorbed due to port delays and route changes, leading to increased freight rates.
Hore also referred to changes in trade cycles, stating that the severity of the capacity shortage is currently driving up the floor rates for freight.
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