Why 60% of ships are still avoiding the Suez Canal

BIMCO’s assessment suggests that the continued decline in Suez traffic is not linked to the canal’s operational status, but rather to persistent security concerns in the Red Sea region. Although attacks by the Houthi movement on commercial shipping have paused, the group has not formally withdrawn its threats.

From the perspective of shipowners and insurers, this means the risk has not disappeared. As a result, war-risk premiums for Red Sea transits remain elevated, and some insurance policies still include exclusions or additional conditions for the area. According to BIMCO, a temporary lull in hostilities is not sufficient to trigger a large-scale return of traffic.

Rerouting via the Cape has become the new normal

Industry sources report that many container lines, tanker operators and bulk carriers have now fully adapted their networks to routes around the Cape of Good Hope. While this option increases sailing distances and fuel consumption, it offers more predictable operating conditions.

BIMCO notes that once global shipping networks have been restructured, operators are reluctant to change them again unless there is a clear and lasting improvement in security conditions. In practical terms, this means that even if individual ships test the Suez route, a full return of regular services is unlikely in the short term.

Impact on Egypt and the canal operator

The Suez Canal Authority has previously confirmed a sharp decline in daily transits and canal revenues compared with 2022 and early 2023. In response, it has introduced temporary incentive schemes, including transit fee discounts, in an attempt to attract vessels back.

However, industry analysts quoted by gCaptain and Riviera Maritime point out that pricing incentives alone cannot offset security-related costs such as insurance premiums and crew risk considerations. These factors are largely outside the control of the canal authority.