Container capacity through the Suez Canal has passed half of pre-disruption levels for the first time since the Houthi attacks began. Weekly capacity transiting the canal averaged 753,000 TEU in the first two weeks of October, Clarksons Research figures cited by BusinessLine show1. The comparable weeks of 2023 averaged 1.457 million TEU1.
The Suez Canal Authority said container ship tonnage through the canal rose 54.2% in January to August 2026 from a year earlier1. The recovery gathered pace after Gemini announced in July that it would route services via the canal, with the Ocean Alliance, Premier Alliance and MSC also announcing changes1.
For Indian exporters the shift shows up in price and time. Tuticorin to Antwerp and Rotterdam is quoted at $2,350 to $2,450 per 40-foot container, against $6,100 to $7,000 at the July peak, said Ramu Shanmugam of the Tiruppur Exporters' Association1. Chennai to Rotterdam transit is down to 23 to 24 days from 34 to 36 days via the Cape, he said1.
Two yardsticks, one direction
Other measures are less flattering. Analyst Lars Jensen estimated that Suez routing was back at roughly 30% to 35% of normal across the market. He said backhaul services were recovering faster than headhaul sailings2. Xeneta counted 448,273 TEU of scheduled weekly capacity crossing Bab el-Mandeb in at least one direction on 5 October. That was 48% of the 930,679 TEU offered in August 20234.
The bases differ: Clarksons measures capacity actually transiting the canal against the same 2023 weeks1. Xeneta measures scheduled capacity at the strait that forms the Red Sea's southern entrance, against August 20234. Jensen estimates routings across the market2. The direction of travel is agreed; the level depends on the yardstick. Xeneta said the Bab el-Mandeb figure had doubled since 27 August 20264.
Rates fall, then firm
India to Europe and UK rates fell by $400 to $600 per container in three weeks, and Shanmugam expects more softening through November1. On the wider Asia to North Europe lane, the Freightos index rose 6% to $3,442 per FEU, or 40-foot container, while Asia to Mediterranean rates rose 3% to $3,927 per FEU2. Those gains followed general rate increases timed to the start of 2027 contract talks2.
The India-specific quotes rest on one published source, the BusinessLine report quoting the Tiruppur Exporters' Association office-bearer1. No second published quote for those lanes was available, so buyers should check their own forwarder rates.
The carrier sum: $43 a slot, then insurance
Drewry's voyage-cost comparison shows the saving carriers are weighing, though it calls the benefit marginal5. A round voyage through Suez covers about 21,878 nautical miles over 97 days, against 29,711 nautical miles and 124 days via the Cape1. For a 24,000-TEU ship that saves about $1 million per round voyage, or roughly $43 per slot, before war-risk insurance1.
Drewry cautions that the edge is thin once insurance is added. It leaves war-risk premiums out of its formal analysis because they are negotiated voyage by voyage5. Its illustration: on a $225 million ship, a one-way premium of 0.3% of hull value adds $1.35 million to a round voyage with two transits of the Joint War Committee listed area. At 1%, the extra cost is $4.5 million and would likely send carriers back round the Cape5.
Drewry also notes 50% rebates on incident-free voyages, and canal discounts are discretionary5. A 15% fee cut saves about $365,000 on two transits by a 24,000-TEU ship, and a 25% cut about $600,0005.
Why US-bound cargo has not followed
US-bound rates have held up. The Freightos Baltic Index put Asia to US West Coast at $8,126 per FEU and Asia to US East Coast at $9,700 per FEU last week2.
US container imports hit 2,546,261 TEU in September, the highest September on record and up 10.3% from a year earlier, Descartes reported6. Carriers blanked 58,200 TEU on the Far East to US West Coast trade and 35,500 TEU on the East Coast run in the week to 16 October4. Panama Canal restrictions still shape Asia to US East Coast routings, a factor Yang Ming cited for fourth-quarter revenues7, 6.
The trans-Atlantic shows little relief either. Spot rates rose to roughly $2,850 per FEU, about 25% above year-earlier levels, which may reflect higher bunker costs2. Shanmugam said US-bound shipments from India had yet to see comparable benefits1.
The question for 2027 contracts
The case for caution rests on supply. BIMCO expects fleet capacity to grow 4.6% in 2026 and 9% in 2027, with the order book above 14 million TEU, or 42% of the existing fleet3. Supply grows faster than demand in 2027 under both of its scenarios, one with Hormuz effectively closed and one with normal transit3. Gradual normalisation could leave ship demand growth five percentage points lower; full normalisation could leave ship demand 10% lower than if Cape routing continues3.
"Accelerating fleet growth could weaken the supply/demand balance in 2027," Rasmussen said3.
Drewry expects Suez transits to reach 80% of pre-diversion levels by February 20275. Hapag-Lloyd chief executive Rolf Habben Jansen said the alliance expects nearly all services back on Suez routings in the first quarter of 2027 if conditions hold2. Gemini adds an Asia-Mediterranean string, AE18 for Maersk and SE5 for Hapag-Lloyd, first sailing from Shanghai on 22 November2. ONE and HMM are expected next8.
Asia-Europe spot rates are still rising, and some forwarders doubt the increases will hold2. Xeneta sees 2027 rates flat to modestly higher, with the Red Sea, demand and newbuild deliveries as swing factors, and tells shippers to budget a range rather than a midpoint9.
What could unwind it
Two risks sit close to Indian supply chains. Attacks in the Strait of Hormuz continue, including the sinking of the feeder vessel GFS Pride10. UKMTO recorded 12 vessels attacked between 5 and 11 October, the largest weekly total since the war began10. Berthing delays have lengthened at Fujairah and Khor Fakkan in the UAE, and feeder capacity on the India-Middle East trade is strained11.
Drewry said the threat that caused the diversions has not gone away, noting that the Houthis have strengthened their position along Yemen's Red Sea coast5. The 2027 negotiation is therefore a market that should loosen on supply, with carriers still pushing increases, and one security incident able to reset rates and transit times.