Maersk Boosts Suez Canal Route As Global Container Market Tightens

Maersk, the world's second-largest shipping company, is increasingly using the Suez Canal route from Asia to Europe due to tight global shipping market conditions caused by port congestion and altered trade flows. Patrick Hore, Maersk's global vertical head of chemicals, explained that the Suez Canal allows for shorter transit times and lower CO2 emissions compared to sailing around the Cape of Good Hope.

With six major services now operating between Asia and Europe, Maersk is seeing significant cost savings and emission reductions.

The container shipping market is facing challenges despite weak or flat demand. Maersk is operating at around 96% capacity, not due to a surge in demand, but because freight is slow to move through ports and distribution networks. This delay is absorbing global fleet capacity. Maersk's shift to the Suez Canal route could further alleviate capacity issues by shortening voyages; however, it may also create temporary congestion in Europe as vessels rerouted through the canal meet slower ships coming around the Cape of Good Hope.

Hore identified congestion at ports and within inland logistics networks, such as rail, road, and barge systems, as the main issue. Europe faces truck driver shortages, rail capacity limits, and infrastructure upgrades causing delays. Similar problems are present in India, the US, and South America. Maersk is investing in terminal capacity and land-side logistics to address these bottlenecks and improve reliability.

Low water levels in critical waterways like the Rhine, Danube, Panama Canal, and Manaus in Brazil are further hindering efficiency and increasing costs.

In 2025, the market anticipates overcapacity due to new vessels entering service, which have been absorbed by port congestion and rerouting. Maersk has ordered 26 new dual-fuel vessels, but these new ships are quickly being utilized due to existing congestion. Despite the market's improvement, shipping rates remain high, making capacity additions more commercially attractive. The industry is witnessing a shift in cyclicality, with severe lows being lifted by persistent tightness in capacity.

Middle East disruptions and weaker European production have created opportunities for US polymer exports into Europe, while China is now exporting chemicals, energy-transition products like batteries, solar, and wind technology, and automobiles globally. The imbalance is causing container availability problems in Europe, particularly for 20-foot containers crucial to the chemical industry.

Maersk is supporting bunkering facilities and adapting to disruptions in the Strait of Hormuz, while preparing for long-term disruptions through strategic reserves and alternative logistics routes.

Green shipping demand is lagging behind capacity, despite companies having sustainability targets. Maersk is investing in green methanol, LNG, and retrofit options, with some vessels able to run on green methanol. However, customer demand for low-emission transport is not increasing as quickly as needed. Maersk offers tiered greener transport options, but the added costs remain a concern for low-value cargoes such as polymers.

Maersk's Gemini network is performing well and improving reliability while offering operational flexibility.