Premier Alliance is preparing to send one of its Asia-Europe services through the Suez Canal this month. This action is particularly taken as we witness the gradual return of competitors of this alliance to maritime services via the Red Sea. The first voyage of this new service, with the tanker ONE Continuity which has a capacity of 8,110 TEU, will start on October 17 from the port of Laem Chabang.
Transformation in Maritime Routes
This change is considered the first collaborative action of Premier Alliance to return to the Suez Canal route after adopting a longer route around the Cape in January 2024. Meanwhile, companies Maersk and Hapag-Lloyd continue their return to this route, with Maersk's SE1 service heading to the Suez Canal from the port of Tanjung Pelepas starting on October 27.
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Increasing Demand for Maritime Services
Recent changes in maritime services are particularly evident given the increasing demand for maritime services. According to estimates by Maritime Strategies International (MSI), about 35 percent of Asia-Europe voyages are currently conducted via the Red Sea. At the same time, Linerlytica has reported that over 140 container ships, with a capacity exceeding 2 million TEU, have returned to the Suez Canal routes since May.
However, security remains the main barrier to the rapid normalization of maritime services. The demand for maritime escorts in the southern Red Sea has increased to the extent that the EU’s Aspides mission has acknowledged that the existing warships are insufficient to cover all requests.
Transport via the Cape has acted as one of the most effective methods to attract a massive flow of container ship supplies since the outbreak of COVID-19. Reports indicate that container ship orders have now reached a record 15.6 million TEU, which is equivalent to over 45 percent of the existing fleet.
Freight markets are also showing the first signs of pressure. According to recent assessments by Freightos, spot rates for Asia-Europe have decreased by 9 percent to $3,376 per FEU, and Asia-Mediterranean rates have decreased by 7 percent to $3,620. Analysts attribute part of this weakness to the gradual return of Red Sea services, which is bringing back effective capacity.
Overall, MSI has also warned that re-transiting the Suez Canal could impact revenues, as the shorter route reduces demand for ships. Nevertheless, recent forecasts indicate that charter markets will remain strong in the first half of 2027, especially for small and medium-sized vessels.
Currently, congestion is absorbing more potential surplus. Linerlytica estimates that 3.76 million TEU or 10.9 percent of the global fleet is currently at a standstill due to congestion. Additionally, Sea-Intelligence estimates that a high share of over 8 percent of the fleet affected by disruptions could take seven to ten months to return to normal.
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