Major shipping lines, including Maersk and Hapag-Lloyd, are actively shifting vessels back to Red Sea transits. After nearly two years of rerouting around the Cape of Good Hope, some services, particularly those connecting Asia to the GCC and Europe, are using the Suez Canal again. This move started cautiously in late 2025 and has accelerated in February 2026, as carriers assess security improvements in the region.
The Cape of Good Hope detour added significant time and cost. For example, a container from Singapore to Dubai took an extra 10-15 days, impacting inventory management and lead times for Philippine-sourced goods heading to the Middle East. Reopening the Suez Canal immediately shaves off this extra transit time. This also releases tonnage back into global circulation, putting downward pressure on spot freight rates, which have already seen week-on-week drops of 7-10% on key lanes.
What it means for you
Expect faster arrivals for your shipments originating from or transiting through Asia, destined for the GCC (Dubai, Jeddah, Dammam) and Europe. However, this speed comes with potential invoicing complexities. Carriers are quickly adjusting their surcharges, so vigilance is required to ensure you’re not paying for risks that no longer apply.
What you should watch
- Transit Time Adjustments: Immediately update your internal systems and inform customers about shorter Estimated Times of Arrival (ETAs) for relevant routes. This can free up capital tied in transit.
- Freight Rate Volatility: Avoid locking into long-term contract rates this month. Spot rates are under pressure. Use this opportunity to negotiate better terms for immediate bookings, especially for goods from Clark, Cebu, or Manila heading west.
- Surcharge Removals: Scrutinize your invoices. The “Emergency Risk Surcharge,” “War Risk Surcharge,” or similar fees should be dropped or significantly reduced as soon as vessels re-enter the Suez Canal. Challenge any carrier maintaining these surcharges without clear justification.
- Insurance Premiums: Consult your cargo insurance provider. Premiums for specific lanes might change as the risk profile of the Red Sea transit evolves. This could be a small but noticeable cost reduction.
- Port Congestion: While vessels save transit time, watch for potential minor congestion spikes at key transshipment hubs like Singapore or Jebel Ali as schedules readjust.
What to avoid
- Outdated Lead Times: Do not plan your inventory with 2025’s longer transit times. Using old buffers will lead to early arrivals and increased storage costs at your destination warehouse.
- Passive Acceptance of Surcharges: Do not automatically pay Red Sea-related surcharges. Demand clear documentation from your carrier explaining the basis and duration of any such fee.
- Ignoring Market Dynamics: Don’t assume rates are stable. The market is highly fluid. Failing to check current spot rates before booking can lead to overpaying.
Amit Maheshwari is the CEO of Softlink Global. He built Logi-Sys, a freight platform now used in over 50 countries. With 30 years in the industry, he focuses on fixing operational bottlenecks through software. He writes “IT in Logistics” for PortCalls Asia to cut through the tech hype and address the reality of moving cargo.
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