Ocean Oct 17, 2026 · 8 min read

Suez and Panama capacity comes back as the Houthis widen their war

Red Sea capacity has doubled in six weeks. The risk hasn’t gone down. Weekly container capacity crossing Bab el-Mandeb reached 448,273 TEU (twenty-foot containers) on 5 October, Xeneta says. That is double late August, but only 48% of August 2023. Our view: the return is real, but the war around it is getting worse. Since Thursday the Houthis have hit Aden’s presidential palace and its airport. On Friday a missile aimed at the Saudi oil port of Yanbu was shot down. Panama is easing too, to 33 daily transits. Confirm the routing on every Asia–Europe booking. Our call: Bab el-Mandeb capacity tops 550,000 TEU a week by end of November, unless a container ship is hit.

The Red Sea is open for business and at war at the same time
On 5 October, weekly scheduled container capacity crossing Bab el-Mandeb was 448,273 TEU in at least one direction. Bab el-Mandeb is the narrow strait between Yemen and the Horn of Africa that leads to the Red Sea and the Suez Canal. The figure comes from Xeneta, the ocean and air freight analytics firm. It has doubled since 27 August. A TEU (twenty-foot equivalent unit) is the standard measure of container capacity. One forty-foot box counts as two TEU.
That is still only 48% of the 930,679 TEU that crossed each week in August 2023, before carriers began diverting around the Cape of Good Hope. But the direction is clear, and it is moving fast.
Our view is that carriers have done the sums and decided the Cape is now too expensive. The security picture has not got better to match. That makes this return a commercial bet, not a judgement that the danger is over. Commercial bets can be reversed in days. Forwarders should treat every Suez routing as provisional until the box is through the strait.

What the capacity numbers say

Xeneta’s senior shipping analyst, Emily Stausbøll, did not hide how sudden this is. “The return of container shipping to the Red Sea is accelerating,” she said. She added that the move “indicates a major shift in strategy from carriers”.
She was also frank about what nobody outside the carriers knows. “Only carriers can answer what has changed in security assessments in the last six weeks,” she said. Whatever the reason, she said, “this will see capacity released back into the global fleet” and will “have a profound impact on freight rates and services heading into 2027.”
The timing makes sense, in her view. October is after peak season, when volumes usually fall. Some of the freed capacity will be soaked up by port congestion “in global ocean networks, at least for now,” she said.
The return has been building all year. In July, Maersk moved its MECL service (Middle East and India to the US East Coast) back to the Suez route. It said: “This change marks a further step towards a gradual return to the trans-Suez corridor.” That is according to a Kuehne+Nagel news page published on 10 July. The same report said the change would cut westbound voyages by about seven days and eastbound by about 14.
By mid-August, MSC had sent seven ships through Bab el-Mandeb in two weeks, Seatrade Maritime reported on 18 August. Maersk had moved 30% of its Cape-routed volumes back to the Red Sea. Analysts at Linerlytica said at the time: “It sends a clear signal that the full resumption of Red Sea transits could come earlier than anticipated”.
The next marker is close. Maersk and Hapag-Lloyd’s AE12 Asia–Mediterranean service is due to switch to Suez in both directions from 27 October. The first sailing is the Umm Qarn, leaving Tanjung Pelepas in Malaysia that day, Ahram Online reported on 29 September. Hapag-Lloyd described the shift as gradual and service by service, with each transit subject to a security review under naval protection.

The war that hasn’t stopped

While carriers have been coming back, the fighting on the Yemeni shore has got worse.
Al Jazeera reported on 17 October that the Houthis fired five missiles at the al-Maashiq Presidential Palace in Aden on Thursday 15 October. Five people were killed and 16 wounded. Aden is Yemen’s interim capital, and the palace is the internationally recognised government’s headquarters. On Friday two missiles landed on the grounds of Aden International Airport as a Yemenia flight to Cairo was getting ready to take off. They hit about 500 metres from the plane.
Also on Friday the Saudi-led coalition said it intercepted a ballistic missile headed for Yanbu, which Al Jazeera described as “a Red Sea oil hub”. Yanbu matters more than usual right now. Iran closed the Strait of Hormuz in March, so Saudi Arabia has leaned on its East-West pipeline to export oil from the Red Sea coast instead of the Gulf.
The strait itself is in Houthi hands. “Last month, the Houthis took control of the Bab al-Mandeb strait, one of the world’s most important waterways,” Al Jazeera wrote. It added: “The Houthis announced a blockade on Saudi ships there earlier in the year.” On 9 October the UN special envoy, Hans Grundberg, told the Security Council that Yemen had slid back into “full-scale war”.
Insurers noticed. In July, after the Houthis announced a maritime embargo on Saudi Arabia and two Saudi-linked ships were attacked, London’s Joint War Committee moved its Red Sea high-risk line further north. Marine Insight reported on 31 July that indicative war-risk premiums for southern Red Sea voyages had risen to 1% to 2% of a ship’s value, from about 0.3%. Security firm Ambrey warned at the time: “It is likely that vessels could be targeted for mistaken identities”.
That is the risk for container lines. Their ships are not the stated target. But a missile aimed at a Saudi tanker, or a misidentified vessel, could change every carrier’s risk assessment in an afternoon.

What happened last time

There is a recent example of how fast this can flip. Maersk ran trial voyages and said in January 2026 that MECL would resume Suez transits. In February it and Hapag-Lloyd said their ME11 service would also use the Red Sea. By early March both had gone back to the Cape. They cited “unforeseen constraints arising from the wider operating environment in the Red Sea region,” according to the Kuehne+Nagel report.
So the return was reversed within weeks, once already this year. Nothing in the current news suggests the next reversal would be any slower.

Panama is loosening, but not back to normal

The other big chokepoint is also easing. From 15 October the Panama Canal Authority raised daily transit slots from 32 to 33, EFE reported via Infobae. The larger Neopanamax locks are back to their normal 10 a day, up from nine since 3 September. The older Panamax locks are at 23, three below their normal 26. The usual daily average is 36. The maximum draft (how deep a loaded ship can sit in the water) for Neopanamax ships has been 14.94 metres, or 49 feet, since 28 September.
The constraint is water: the canal basin is short of it because of El Niño. On Wednesday 14 October, 51 ships were waiting, and 48 of them had reservations. The canal authority’s message is that while the water deficit lasts, the booking system “sigue siendo la única forma de garantizar una fecha de tránsito”. In English: it is still the only way to guarantee a transit date. For comparison, in the 2023 drought daily crossings fell to 22 by November.
For forwarders on Asia–US East Coast and west coast South America lanes, that means a little more room, but not enough to make all-water Panama routings reliable without a carrier holding a slot.

What it means for rates, lanes and contracts

Rates are not the main story here, but they show how carriers are playing it. On Xeneta’s 16 October figures, Far East–North Europe spot rates rose 2.5% in a week to $3,568 per FEU (forty-foot container). Far East–Mediterranean rose 3.2% to $4,165. Stausbøll called this “likely the balance of supply and demand correcting spot rates that have fallen far enough.”
On the transpacific, carriers are pulling ships instead. In the same week 58,200 TEU of sailings were blanked (cancelled) from the Far East to the US West Coast and 35,500 TEU to the US East Coast. Stausbøll said carriers “would normally be adding capacity rather than blanking sailings”. In her reading, they “don’t believe the market will hold” and “are protecting the current level rather than expecting further growth.”
The orderbook adds to the pressure further out. On 15 October HMM’s board approved KRW 2.168 trillion, about $1.62 billion, for 12 container ships, Container News reported. That is eight 13,000 TEU newbuilds and four smaller resale newbuilds, about 114,100 TEU in all, with the last due by December 2029. The board approval does not mean every contract has been signed. But it is more mid-size tonnage arriving just as the Red Sea frees up the ships that have been tied up on the Cape loop.
Put together, here is what we think forwarders should do:

Asia–Europe and Asia–Med: Expect shorter transits on services that switch, by roughly one to two weeks on some loops. Expect more ships chasing cargo. Short-term bounces in spot rates are unlikely to last into the new year.

Routing clauses: Get the routing confirmed in writing for every booking. Know what happens to your cargo, your cost and your arrival date if the ship turns back to the Cape mid-voyage.

2027 tenders: Build Cape and Suez scenarios into contract talks. Avoid locking in Cape-level rates for a full year if the trade is moving back to Suez.

Red Sea ports: Cargo for Jeddah, Yanbu and Aden carries more risk now than cargo that just passes through. Check the war-risk surcharges and insurance cover before you quote.

Panama: Treat Panama routings as slot-dependent. Ask carriers whether a booking slot is secured.

Our call

Our prediction is that Xeneta’s weekly Bab el-Mandeb capacity figure will pass 550,000 TEU by end of November 2026. That is about 59% of the August 2023 level. AE12’s switch on 27 October will help get it there. This holds as long as no container ship is hit. If one is, we expect the main carriers to announce a return to the Cape within two weeks, as they did in March. We also expect Far East–North Europe spot rates to be lower at the end of December than they are today.

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