17 Feb Threat to early Red Sea return
There have been “notable increases” in maritime insurance premiums, as ceasefire uncertainty clouds the prospect of a late-
March return to the Red-Sea by ocean carriers. After the 19 January ceasefire agreement in Gaza, it was reported that the
president of the Suez Canal Authority was eyeing a late-March return to transits – but the news this week makes this
increasingly tenuous.
President Benjamin Netanyahu said yesterday Israel would resume fighting in Gaza if Hamas did not release Israeli hostages
by noon on Saturday, a threat backed by US president Donald Trump.
The rising tension threatens the three-week-old ceasefire, as well as liner plans to return to using the Suez Canal, as attacks
on shipping in the Red Sea by Houthi rebels only stopped with that agreement.
A Drewry analysis pointed out: “There is too much noise surrounding events that impact on container shipping to confidently
predict its course in the short-term.
“It seems sensible to wait for things to actually happen and then re-consider.”
In Drewry’s shipping stakeholder survey, 54% expected a return to the Red Sea before the end of the year, with 29% not
expecting until 2026 – however, responses were taken before Mr Netanyahu declared his Saturday deadline for hostage
return.
On Monday, Flexport president Sanne Manders’ “best estimate” was that a Red-Sea return would be possible by the end of
H1, “given what I know of what the carriers are thinking”.
Guillaume Caill, head of ocean EMEA at Flexport, added: “I was really thinking about Q2 implementation, that a ceasefire
would hold and carriers would go through. But reading the news and the latest Trump announcements around Gaza… it
might indeed delay that.” In a survey taken during a Flexport webinar, 48% of respondents anticipated a return in late-2025,
30% expected late-Q2, and 14% thought it would not be this year.
Meanwhile, Patrizia Kern, chief insurance officer at Breeze, advised that insurance costs would likely fluctuate due to the
unstable geopolitical situation surrounding the reuse of the canal.
“If the circumstances remain uncertain, it could result in higher insurance premiums as insurers continue to evaluate the
associated risks,” she said. And she pointed out that insurance costs in the Red Sea region “have seen notable increases”.
In September, a 5.9% increase in premiums on the previous year was reported, citing geopolitical tensions as the primary
driver.
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