CMA CGM Pioneers Red Sea Return: A Signal of Normalization or a Risk of Overcapacity?

CMA CGM container ship passes through the Suez Canal (Photo: Suez Canal Authority / Phaata)

In a landmark move towards bringing container ships back to the Red Sea on a large scale, major carrier CMA CGM has just announced that its INDAMEX service will transit the Suez Canal for both fronthaul and backhaul voyages between India/Pakistan and the US East Coast.

The first vessel to complete a full service loop via the Suez Canal will be the CMA CGM Verdi, scheduled to depart Karachi for New York on January 15. Data from eeSea by Xeneta indicates that routing via the Suez Canal instead of the Cape of Good Hope will reduce the full rotation transit time of this service to 77 days, saving two weeks.

Commenting on this development, Peter Sand, Chief Analyst at ocean freight intelligence platform Xeneta, said: “We are still some way from a largescale return of container shipping to the Red Sea, but CMA CGM’s announcement of a full east-west loop via Suez is certainly a notable step in the right direction.”

Sand further analyzed carrier strategies: “We have seen carriers, particularly CMA CGM, testing the water recently by transiting Suez Canal on a select few voyages, particularly backhaul legs to Asia when there is less cargo onboard. Until now, these transits via Suez Canal have been on a case-by-case basis, diverting voyages originally scheduled to sail around Cape of Good Hope.”

Deployment Roadmap and Market Reaction

Before the new rotation takes full effect, four other vessels on the INDAMEX service, including the APL Oregon, CMA CGM Passion, APL Le Havre, and CMA CGM Maupassant, will also make eastbound voyages via Suez. Additionally, other CMA CGM vessels like the CMA CGM Jules Verne, APL Changi, and CMA CGM Kimberley are making this transit, though only a few are considered official scheduled sailings.

In contrast to CMA CGM, other major rivals like Hapag-Lloyd and Maersk have not yet announced specific timelines for a large-scale return to the Red Sea, while ZIM stated it is still awaiting insurance approval.

Peter Sand warned that CMA CGM’s latest announcement does not mean the container shipping industry will rush back to the Red Sea immediately. Data shows the number of container ships transiting the Suez Canal in November 2025 reached only 120, a steep drop from the 583 recorded in October 2023 – before the escalation of Houthi attacks.

Sand commented on security risks: “Carriers will be carrying out risk assessments, and the security situation remains fragile. The assessment will look at the Houthi’s ability, opportunity, and intent to attack ships. We know they have the ability, but carriers will want assurance over their intent, especially because the opportunity will increase as more ships begin sailing through the region.”

Economic Consequences: Risk of Rate Plunge

Shortening the transit time via Suez on the CMA CGM INDAMEX route implies that two vessels will be cut from the service. This serves as a precursor to the impact a large-scale Red Sea return would have on transport capacity and freight rates.

Sand analyzed the economic picture: “There is already overcapacity of supply in the ocean container shipping market and spot rates are falling even without a largescale return to the Red Sea. Average spot rates on Far East fronthauls to US East Coast and North Europe are down 57% and 53% respectively compared to a year ago.”

Concluding on the market outlook, Sand warned: “If we see other carriers follow CMA CGM, then capacity will flood the market and we could see freight rates fall hard. This could push carriers further towards loss-making territory, but they will be fully aware of this outlook and ready to respond.”

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Source: Phaata.com (According to Marine Link)

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