Every few weeks since the start of the year a client has asked me some version of the same question: is the Suez back? I have stopped answering it, because it is the wrong question and answering it encourages the wrong behaviour. Whether the canal is "back" is a matter for carriers, navies, and underwriters. What a cargo owner actually needs is a way to price the two routings against each other on a given lane in a given month, then decide, then write the decision into a contract so it does not have to be relitigated every time the news turns.
That is what this guide is. No forecast about the Red Sea, because anyone selling you one is guessing. Instead, the four numbers I put on a page before advising a routing, where to find each of them, and the arithmetic that turns them into a decision. One framing correction before the numbers, though, because it changes how you should read all of them: in the second half of 2026 this is not a trade-off between speed and price. It is the management of a supply-failure risk, with price as a secondary input.
The security dimension and the insurance mechanics I treat separately, since we covered them in depth in our Strait of Hormuz routing and war risk insurance guide, and the underwriting logic there transfers directly. It is worth reading alongside this one, because with Hormuz effectively shut, Suez and the Cape are carrying decisions that used to be spread across three chokepoints.
Where traffic actually stands, which is not "recovering"
Most coverage picks one statistic and builds a narrative on it. Two are true at once, and only using both keeps you out of trouble.
The Suez Canal Authority's own figures show growth. It has reported revenue up 17.5% year on year, net tonnage up 14.4% to 247.2m tonnes, and vessel numbers up 5.2%, with the chairman forecasting revenues improving to roughly $8bn in the 2026/2027 financial year and around $10bn the year after. Arab News
Set against the pre-crisis baseline, the same canal looks very different. BIMCO puts Suez transits still roughly 60% below 2023 levels. BIMCO Before the diversions the canal was handling on the order of 495 to 500 vessels a week. Growth of 5% on a base that is down 60% is arithmetically real and operationally marginal.
So I would retire the word recovery from this discussion. What is happening is a fragile and reversible normalisation: enough traffic to make the canal a live option, nowhere near enough to make it a stable one, and highly sensitive to a single incident. The honest planning assumption is optionality, never continuity.
The security picture has also moved the wrong way this year rather than settling. Houthi forces have declared a blockade of the Bab el-Mandeb strait and claimed attacks on Saudi tankers, which is a different and broader posture than the targeting patterns of the previous phase. Anyone building a plan around a gradual, orderly return of services should treat that as the fact that undermines it.
Number one: transit time, and what it costs you
Start with days, because every other number follows from them. Shanghai to Rotterdam ran about 30 days via Suez and stretched to 42 to 45 days via the Cape. Sourcing Journal Across Asia to Europe generally, the Cape adds roughly 4,000 nautical miles, somewhere between 6,000 and 9,000 kilometres, and 10 to 18 days depending on service and vessel speed. Air7Seas
Fourteen days is the figure I plan around, and it is not merely a service-level inconvenience. It is working capital. Take a container line moving $5m of goods a month on a lane, at an 8% cost of capital. Fourteen extra days in transit ties up an additional $15,300 per month in inventory sitting on water, roughly $184,000 a year, before you have paid one dollar more in freight. On a lane worth $50m a year the same arithmetic runs past $1.5m.
Then add the safety stock. Longer transit does not only delay goods, it widens the variance around the arrival date, and variance is what safety stock exists to absorb. Every planner I work with ends up carrying two extra weeks of cover on Cape routings, and that inventory is financed, warehoused, and occasionally obsolete. I have watched teams argue for an hour over a $180 per TEU freight difference while ignoring a working-capital swing several times its size.
Number two: the freight and bunker differential
The direct cost side is better documented than the working-capital side, and smaller than most people expect. The Cape routing adds roughly $200 to $400 per TEU once fuel, crew, and vessel positioning are counted, with fuel consumption up about 30% per voyage and a 25% to 30% premium on FAK rates. Air7Seas On the largest ships the absolute numbers get attention: a vessel above 20,000 TEU can absorb $400,000 to $800,000 in additional bunker cost on a single voyage. Air7Seas
Note who pays for what. The bunker figure is the carrier's, and it reaches you through rates and surcharges rather than as a line item. The per-TEU differential is the number to negotiate against. When a carrier quotes you a Cape service and a Suez service on the same lane, that $200 to $400 band is the sanity check on whether the spread you are being shown reflects cost or opportunity.
Number three: the canal's own price, which just jumped
Here is the input most 2026 comparisons still omit, and the one where I was myself too vague until I pulled the actual schedule. From 15 July the Suez Canal Authority raised transit surcharges across most vessel types, and the increases are not marginal. Surcharges on laden tankers went from 25% to 37%, ballast tankers to 27%, dry bulk carriers from 10% to 22%, and vehicle carriers to around 26%. Maritime News
Those are step changes rather than adjustments, and they fall unevenly. A dry bulk operator absorbed more than a doubling of its surcharge. A laden tanker took 12 percentage points. Whether the canal still wins on your cargo now depends on which box your vessel sits in, which was not true in June.
It also means the Suez side of your comparison is a moving quantity. The canal is repricing while carriers are still deciding whether to use it at all, and the toll structure varies by vessel type, tonnage, and direction. If you are comparing quotes issued before mid-July against quotes issued after, you are not comparing like with like. Ask your carrier or forwarder explicitly whether the Suez quote reflects the schedule in force since 15 July. In two cases this month I found it did not, and both understated the canal routing by a margin that would have changed the recommendation.
| Input | Suez routing | Cape routing |
|---|---|---|
| Shanghai–Rotterdam transit | ~30 days | ~42–45 days |
| Added distance | Baseline | ~4,000 nm (6,000–9,000 km) |
| Freight differential | Baseline | +$200–400 per TEU |
| Bunker consumption | Baseline | +~30% per voyage |
| Canal cost | Toll + surcharge: laden tanker 25% → 37%, dry bulk 10% → 22% from 15 July 2026 | None |
| War risk premium | Applies on Red Sea transit | Not applicable |
| Working capital, 14 extra days on $5m/month | Baseline | +~$15,300/month at 8% |
Number four: risk, priced rather than described
War risk premium is the honest way to put a number on security, because underwriters are the only participants in this market who are paid to be right about it. Whatever the current quoted percentage of hull value is for a Red Sea transit on your carrier's service, that is the market's live opinion, and it will be embedded in what you are charged whether or not you see it broken out.
What I would not do is treat the premium as the total risk cost. It prices the vessel, not your supply chain. A diverted or delayed sailing costs you a production stoppage or a missed retail window that no hull policy covers. For cargo where a two-week slip is genuinely unacceptable, the correct treatment is to route it away from the contested option regardless of which spreadsheet wins, or to plan an air conversion in advance rather than in a panic. Our 2026 air freight rates and capacity playbook is where I send clients to price that fallback before they need it.
What carriers are actually doing, which is not one thing
The single most useful correction I can offer is that there is no industry position on the Red Sea. There are carrier positions, and they diverge sharply.
CMA CGM moved first and furthest, restarting its INDAMEX service between India, Pakistan, and the US East Coast via Suez in January and subsequently shifting other backhaul legs onto the canal route. The Loadstar The ME11 service resumed Red Sea and Suez transits in mid-February, which was the first genuinely deliberate reintegration of the route into an active container network. Container News
Maersk and Hapag-Lloyd took a different path. Their Gemini Cooperation resumed limited Red Sea transits in February and suspended them again almost immediately when hostilities between US and Iranian forces erupted at the end of that month. The Loadstar That pattern, rather than CMA CGM's, is the one to plan around. The prevailing posture across the majors is extreme caution: testing the water with a limited number of sailings, retaining the Cape as the standing alternative, and prepared to swing back within days. The Loadstar
Note what that does to the meaning of a Suez booking. You are not buying a 30-day transit. You are buying a 30-day transit that the carrier may unilaterally convert into a 44-day one after your cargo has sailed, on a decision it makes for its own crew and hull rather than for your production line. That optionality sits with the carrier by default, and it is worth a great deal of money.
The consequence for procurement is concrete. Two carriers quoting the same lane in the same week may be offering structurally different products, one with a nominal 30-day Suez transit and live diversion risk, the other with a stable 44-day Cape transit. Comparing them on rate alone is a category error. When I build a tender now, I ask for the routing to be stated per string and I score the bids separately, because a blended average across both routings tells me nothing I can plan on.
Vessel size interacts with this too. The economics of the Cape detour fall hardest on the largest ships, and the deployment logic on Asia to Europe has been reshuffling accordingly. Our overview of the biggest container ships and shipping lines in 2026 explains why the vessel class assigned to your string quietly determines how exposed your rate is to the next routing swing.
The one where the spreadsheet lost
In the spring I ran this comparison for an industrial client shipping components from north Asia into central Europe. The arithmetic favoured Suez by a comfortable margin: roughly two weeks of transit, a meaningful per-TEU saving, and a working-capital benefit that made the case look closed.
We routed Cape anyway. The reason had nothing to do with the numbers on the page. Their production line ran on a two-week component buffer, and a single diverted sailing would have stopped it. The variance, not the mean, was the binding constraint. A 44-day transit they could plan around beat a 30-day transit they could not.
What I took from that file, and now apply as a default, is that the decision rule depends on which side of the buffer you sit. If your buffer comfortably exceeds the diversion delay, take the faster routing and accept the variance, because the working-capital saving is real and recurring. If a diversion would breach your buffer, buy the slower, boring option and stop calculating. The mistake I see most often is teams optimising the average while carrying no protection against the tail.
Write the decision into the contract
Once you have chosen, the work is making the choice durable, and this has become the hardest part of the job rather than the paperwork at the end of it. When every carrier on the Suez route is holding the Cape in reserve and expects to use it, asking one to commit to a routing in writing is asking it to give up the flexibility its own risk managers insist on. Expect resistance, and expect it to be genuine rather than tactical.
Push anyway, because the alternative is that the optionality stays free for the carrier and expensive for you. The contracts I have seen survive this year contain four things, and the ones that generated disputes were missing at least one.
- A named routing per service string, not a port pair. "Asia to North Europe" is not a routing. "Via Suez" or "via the Cape of Good Hope" is.
- An explicit switching clause stating who may change the routing, on what notice, and what happens to the rate when they do. Silence here defaults to the carrier deciding and you paying twice, once in transit time and once in surcharge.
- Transit time commitments with a defined remedy, so that a mid-voyage switch from a 30-day to a 44-day product has a consequence rather than merely an explanation. This is the clause carriers fight hardest, which tells you what it is worth.
- Surcharge transparency, covering both war risk and canal transit charges, given the 15 July increases and the likelihood of more. If a surcharge is passed through, the contract should say what evidence supports it.
Where a carrier genuinely will not commit to a routing, the fallback I negotiate is notice and symmetry: a defined notification obligation when it switches, and a rate adjustment that runs in your favour when the promised fast routing is not delivered. An unenforceable transit commitment is worse than an honest switching clause, because it lets a planner assume a date the contract never actually protected.
One more piece of housekeeping worth the hour it takes: check whether your cargo insurance responds to a Cape routing without notification. Some policies contain geographical or duration conditions that a materially longer voyage can brush against, and finding that out after a claim is an expensive way to learn it.
The third routing is no longer a footnote
I used to treat overland as a curiosity to mention at the end of a routing discussion. That was the right weighting in 2023 and it is the wrong weighting now, so I have moved it into the main analysis for every Asia to Europe lane I look at.
The reason is what has happened to the alternatives around it. With Hormuz effectively closed, flows that used to have three options have two, and pressure has piled onto both. Saudi crude is moving increasingly via Suez or the SUMED pipeline, while the Bab el-Mandeb risk pushes other cargo all the way around Africa, adding 20 to 30 days to a voyage. When the slow maritime option becomes that slow, a rail transit that sits between ocean and air stops being exotic and starts being the thing that keeps a factory running.
Rail across Eurasia is entirely unaffected by what happens at Bab el-Mandeb, which is its whole argument. Transit-time and documentation work on the Trans-Caspian route has moved quickly, and our guide to digitalizing the Middle Corridor in 2026 covers where the corridor actually stands on paperwork and border dwell, which is where its transit claims are won or lost.
Two honest limits. Rail will not take your whole volume, and corridor capacity constraints are real rather than rhetorical. It is also not cheap against ocean. What it does is cover the specific slice of a book where a 44-day ocean transit is unacceptable and air is unaffordable, and in the second half of 2026 that slice is larger than it was. My working rule now is to size that slice deliberately at the start of a planning cycle rather than discovering it during a disruption. If the choice on your desk is framed as Suez versus Cape, you are looking at too small a menu.
For context on how the chokepoints compare by volume and throughput, our ranking of the world's biggest and busiest canals in 2026 puts the Suez in proportion against the alternatives.
What I would do this quarter
Pull your four numbers for each major lane and write them on one page: transit days both ways, the per-TEU differential your carrier is actually quoting, the current war risk premium, and your own cost of capital applied to the transit gap. Then ask one question about each lane, which is whether a two-week diversion breaches your inventory buffer. That single test will sort most of your book faster than any amount of rate analysis.
Next, re-verify that your Suez quotes reflect the surcharge schedule in force since 15 July, because a stale quote flatters the fast routing, and the increases were large enough to reverse a marginal comparison. Score your carriers by routing rather than by average, since one may be offering a fundamentally different product from another at a similar price. Get the switching clause and the transit remedy into your contract language now, and accept that carriers will resist it precisely because they intend to use the flexibility.
Then do the piece most books are missing: size the slice of your volume that cannot tolerate a 44-day transit, and place it deliberately on rail or on a pre-agreed air conversion instead of leaving it to be discovered during the next disruption.
The shippers who handled this year well were not the ones who predicted the Red Sea correctly. They were the ones who stopped treating this as a speed-versus-price decision, priced both routings honestly including the July surcharges, worked out which lanes their inventory buffer could not protect, and put the answer in writing so the next headline did not reopen the question. The canal will keep changing its mind, and in the current security picture it may change it sharply. Your framework does not have to.