Ocean Rates Could Fall As Houthis Say They Will End Red Sea Attacks

By Stuart Chirls of FreightWaves

Yemen’s Houthi rebels said they will cease attacks on Israel and on merchant shipping in the Red Sea as a ceasefire between Israel and Hamas took effect Sunday.

“If Israel stops the aggression in Gaza, and if the U.S., UK and Israel stop the aggression against Yemen, the Houthis will stop their operations, including attacks against navies and commercial ships,” Houthi spokesperson Mohammed al-Bukhaiti told Arab news service Al Jazeera on Saturday.

The ceasefire began over the weekend with an exchange of Israeli hostages from Gaza and Palestinian prisoners held in Israel. Later phases will include the withdrawal of Israel from Gaza.

Ocean lines have said they are watching developments in the Red Sea but have offered no timeline to resume regular schedules there. Among major lines, only CMA CGM has maintained a schedule on the Suez Canal route.

“The situation in the Suez Canal remains fluid and the security situation is unclear,” said MSC, in an email to FreightWaves. “In order to guarantee the safety of our seafarers and to ensure consistency and predictability of service for our customers, MSC will continue to transit via the Cape of Good Hope [around Africa] until further notice”

The diversions away from the Red Sea absorbed capacity and pushed up rates to cover higher operating expenses for voyages as much as two weeks longer than normal. That’s been a boon for carriers who saw profits swell by billions of dollars in late 2024.

But a confluence of factors could moderate prices with negotiations on 2025 ocean rates well underway: a return to less costly sailings on the Suez route; a slack shipping season ahead of Lunar New Year; and the deployment of new ships expected to begin in February, when reorganized carrier alliances and vessel-sharing agreements go into effect.

The Iran-backed Houthis, a rebel militia that controls about 40% of Yemen, began attacking merchant ships they claim were linked to Israel and Israel-supporting countries in the Red Sea-Suez Canal route shortly after the terrorist attacks by Hamas on Israel on Oct. 6, 2023. The attacks have reshaped the global supply chain as major container and crude oil tanker lines connecting Asia, Europe, the Mediterranean and United States have diverted away from the region and on longer voyages around the Horn of Africa.

A multinational force of American and European Union navies has taken up patrols of the Red Sea and Gulf of Aden, escorting vessels and turning back Houthi strikes.

Two merchant seamen have been killed in the Houthi attacks, and two vessels and their crew remain captive, in Yemen and Iran.

At the same time, U.S. and U.K. forces have continued to carry out strikes on Houthi targets inside Yemen. Attacks against shipping have declined in recent months as the Houthis shifted to more direct attacks on Israel.