CMA CGM Retreats from Return to Suez-Red Sea Corridor for Three Routes
In a brief statement issued to customers, French carrier CMA CGM announced that it would be resuming rerouting vessels via the Cape of Good Hope. The surprise announcement came just weeks after the carrier reported it was implementing a return for more of its routes and the first regularly scheduled voyages through the Suez Canal and Red Sea since late 2023.
The company made only a brief reference to a “complex and uncertain international context,” while saying it would continue to constantly and closely monitor its operations. The decision impacts two of its “French Asia Line” routes connecting ports in Northern Europe with China and Asia, and its “Mediterranean Club Express” between Asia and the Mediterranean. Another route to India appears not to be affected and will continue to transit the Suez Canal and Red Sea.
The company did not provide any additional context for the decision to reroute vessels just as the industry was taking steps toward restoring routes through the corridor. CMA CGM had maintained a limited number of transits throughout the conflict in the region using warship escorts from the EU Operation Aspides. Most of its prime liner routes were going around Africa until the decision to restore a handful of routes this month. Maersk last week announced it too planned to resume transits of the corridor on a route between India and the U.S. East Coast.
CMA CGM has still be using Operation Aspides warship escorts through the Red Sea (EU Operation Aspides)
The Maritime Executive highlighted last week that the leader of the Houthi movement had made new threats. They were against Israeli positions in Somaliland and not shipping, but signaled the potential for additional regional instability. Tensions also remain high between the U.S. and Iran, with the U.S. repositioning the Abraham Lincoln Carrier Group from Asia to the region as Iran tries to stop internal protests against the financial policies and practices of the repressive regime.
“There is also irony in CMA CGM – previously the most proactive major carrier in returning to the Red Sea - taking a backward step just a few days after Maersk - generally the most risk-averse carrier - announcing its MECL service will begin transiting the Suez Canal again. It typifies the unpredictability shippers must deal with,” said Destine Ozuygur, Senior Market Analyst at Xeneta, a logistics market data firm.
Ozuygur highlights that shippers seek predictability in their supply chains. He said CMA CGM risks “undermining confidence in schedule reliability” with the sudden reversal of policy. Xentea notes that the passage time for CMA CGM’s Northern Europe routes decreased from 105 to 98 days when the ships returned to the Suez Canal.
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In the past, the decision to reroute vessels was more closely linked to specific threats or incidents. Carriers such as Maersk and Hapag-Lloyd suspended their transits two years ago, acknowledging that their vessels had been targeted by the Houthis. While the vessels had only experienced minor damage or close misses, the carriers emphasized the concern for the safety of the crew and vessel, and no one questioned the decision to suspend and then reroute service.
The decision is also a setback for the Suez Canal Authority, which was looking to rebuild volume this year. It has been active in its communications with the major carriers and highlighted the renewed stability in the region after the Gaza ceasefire.