Maersk Resumes Suez Canal Route, Signaling Trade Recovery

Maersk will resume using the Suez Canal after disruptions due to Yemeni Houthi attacks, aiming to reduce transit times and costs. This move marks a potential end to two years of trade disruption. Continued stability in the region allows for a gradual return, with contingency plans in place.

Maersk announced on Thursday that it will resume utilizing the Suez Canal this month, marking a critical step towards alleviating two years of global trade disruption resulting from Yemeni Houthi attacks on ships. This move led to the Danish shipping group's share price dropping over 5%, suggesting potential lower freight rates as vessels transition back to using the shorter Suez route.

The resumption comes as shipping companies reconsider their strategies for the crucial Asia-Europe trade corridor. Previously, vessels had to reroute around Africa due to attacks in the Red Sea aimed at showing solidarity with Palestinians in Gaza. Maersk's MECL service, connecting the Middle East and India with the U.S. east coast, is the first to return to the Suez route, starting January 26.

Maersk has been cautious, with their decision reflecting a perceived stabilization in the region, including the Suez corridor. While security concerns persist, many customers welcome the potential for reduced transit times via the Red Sea and Suez. The German chemical industry association VCI sees Maersk's decision as a positive sign, expecting it to decrease transit costs and potentially increase imports from China.

(With inputs from agencies.)