Container shipping through the Suez Canal reached over half of pre-disruption levels between January and August 2026. This recovery brings relief to Indian exporters facing high costs. "Ocean freight rates from Tuticorin to Antwerp and Rotterdam are currently quoted at $2,350-2,450 per 40-foot container," said exporter Ramu Shanmugam recently.
The recovery in container shipping through Suez Canal is more than half of pre-disruption levels
After three years of diversions around the Cape of Good Hope, Suez Canal is seeing a recovery to more than half of pre-disruption levels and this has raised hopes for trade.
Container-ship tonnage transiting the Suez Canal during January-August 2026 was 54.2 per cent higher than a year earlier, according to the Suez Canal Authority.
During the first two weeks of October, weekly container ship capacity transiting the Suez Canal averaged 753,000 TEU (twenty-foot equivalent units), as against 1.457 million TEU in the corresponding period in 2023, according to Clarksons Research. This is the first time since Houthi attacks that transits have exceeded 50 per cent of pre-disruption levels, Niels Rasmussen, Chief Shipping Analyst at BIMCO, said.
Gathering pace
The recovery gathered pace since the Gemini Alliance comprising Maersk and Hapag-Lloyd announcing in July its services via the canal. Similarly, Ocean Alliance and Premier Alliance and MSC, also announced routing changes.
This also comes at a time when there is a movement of goods to the year end festive in the US and Europe.
The disruption started In November 2023, when Houthis targetted Israeli ships in the Red Sea in response to Israeli attacks in Gaza. This was extended to commercial ships, leading to diversion via the Cape of Good Hope. By the last week of 2023, weekly container ship capacity transiting the Suez Canal had fallen to 330k TEU, compared with the year-to-date average of 1,290k TEU, says BIMCO.
The revival of the key shipping corridor is significant for Indian businesses trading with Europe, the UK, the Mediterranean region and the US. This includes for key products such as textile exporters, engineering goods manufacturers and chemical producers with reduction in both time and freight.
Ramu Shanmugam, CEO of Clothing Connections and Chairman of the IT Wing Subcommittee of the Tiruppur Exporters' Association, said ocean freight rates from Tuticorin to Antwerp and Rotterdam are currently quoted at $2,350-2,450 per 40-foot container. This is compared with $6,100-7,000 during the July peak. Chennai-Rotterdam transit times have also improved to 23-24 days, against 34-36 days via the Cape of Good Hope, he said.
Indian exporters to Europe and the UK have seen freight rates fall by $400-600 per container over the past three weeks, with further softening expected through November, Shanmugam said. Shipments to the US East and West coasts, however, have yet to see comparable benefits, he added.
Sean Fang, China-Europe Rail & Multimodal Specialist based, said that research firm Drewry's analysis shows that a round voyage through the Suez Canal covers approximately 21,878 nautical miles and takes 97 days as against 29,711 nautical miles and 124 days via the Cape of Good Hope. The shorter route saves about 7,833 nautical miles and 27 days per round voyage.
Drewry estimates that using Suez saves around $1 million per round voyage for a 24,000-TEU vessel, equivalent to roughly $43 per slot, before additional war-risk insurance costs. However, the extent to which these savings reach shippers will depend on service restoration, demand and operating conditions.
"The decision to selectively utilise the Suez route by container operators offers a sigh of relief to export trade, which is plagued by high freight costs and longer transit times," said J Krishnan of Natesa Iyer, a Chennai-based freight forwarder.