Return of Mega Container Ships to Suez Canal Offers Relief to Indian Exporters

Large container ships are returning to the Suez Canal as shipments for the Christmas and New Year season to Europe and the US gather pace, with shipping lines beginning to restore services on the key Asia-Europe trade route.

The Suez Canal recently witnessed the transit of the Bangkok Maersk, a container ship with a carrying capacity of 17,200 TEUs, on its voyage from Italy to Singapore. This was confirmed by a social media post from Ossama Rabiee, Chairman and Managing Director of the Suez Canal Authority. This follows the passage of CMA CGM’s mega container ship CMA CGM Saint Germain from Morocco to Malaysia through the canal approximately a month ago.

This renewed movement of mega vessels follows nearly 1,000 days of shipping disruptions through the canal. The disruptions began in late 2023 following attacks on commercial vessels by Yemen-based Houthi forces. Consequently, major container lines diverted their services around the Cape of Good Hope to avoid the Red Sea, which added significant sailing time and operational costs.

For Indian exporters, particularly those shipping time-sensitive apparel, textiles, engineering goods, and other seasonal merchandise to Europe and the US, a sustained return of container services through the Suez Canal is expected to ease logistics costs. It is also projected to improve transit reliability during the critical peak export season.

The current developments mark an important step toward the gradual return of regular container services through the Suez Canal, avoiding the longer alternative route around the Cape of Good Hope. This shift can cut voyage times by about two weeks and significantly reduce additional fuel and freight costs for carriers and shippers alike.

Jagannarayan Padmanabhan, Senior Director and Global Head of Consulting at Crisil Intelligence, noted that the return of large container vessels through the Suez Canal is a positive development for Indian trade. He pointed out that India’s West Coast ports are well-positioned to benefit from shorter transit times to Europe, which can potentially reduce freight, inventory, and working-capital costs. He added that the timing is favourable with upcoming Christmas and New Year shipments, and improved reliability will further support India-Europe trade.

Similarly, J Krishnan of Chennai-based S Natesa Iyer Logistics LLP stated that the opening of the Suez Canal and the resumption of merchant shipping without restrictions or conditions will provide significant relief to global trade. According to Krishnan, supply chains will regain reliability, freight costs will decrease, and increased service frequencies will help Indian exporters approach the upcoming Christmas season with greater confidence to meet foreign buyers' expectations.

An official representing a Tiruppur-based textile exporter shared a similar view, describing the revival as a positive development for the textile trade. The official noted that if shipping lines sustain Suez services and reduce freight rates, it will provide much-needed relief to exporters.

"The resumption of container shipping through the Suez Canal is a welcome development for Indian exporters dealing in seasonal and time-sensitive goods like textiles and engineering items. For businesses operating on tight margins, a reduction in transit time by two weeks and lower freight costs will directly improve cash flow and working capital efficiency. As global supply chains gradually stabilize, Indian enterprises must leverage these shorter routes to enhance their delivery reliability and strengthen their competitive edge in Western markets." — Dr. Shishir Gupta, Founder & CEO, StartupLanes