Container lines are unlikely to resume Red Sea-Suez Canal operations soon, even as Israel and Hamas negotiate a US-backed peace deal in Egypt. Security concerns remain paramount for carriers, reported American Shipper.

US Secretary of State Marco Rubio said 90 per cent of the agreement is complete, with final details on prisoner releases and troop drawdowns pending. However, carriers remain wary after Houthi attacks forced widespread diversions in early 2024.

The Suez Canal Authority's chairman Osama Rabie said canal revenue has dropped by up to 60 per cent, with daily transits falling to 32 ships from 75 before the Gaza war. Carriers rerouted services via the Cape of Good Hope, adding costs and delays.

A fragile ceasefire in January 2025 failed to restore confidence, and hostilities resumed in March. Despite windfall profits from diversions in 2024, Trump administration tariffs have weakened eastbound transpacific demand, pushing rates to 2023 lows.

US and EU naval escorts have not deterred Houthi attacks. In December, the US Navy accidentally downed a fighter jet and lost two more in separate incidents while evading Houthi weapons. Attacks have since escalated, sinking merchant ships and harming crews.

The Royal Navy reported ongoing GPS interference in the Red Sea, Gulf of Aden and Persian Gulf. AP Moller-Maersk chief executive Vincent Clerc said vessels will not return until security is reliably restored.

Mediterranean Shipping Co (MSC) chief executive Soren Toft echoed the caution, citing unacceptable risks. Ocean Network Express head Jeremy Nixon said rerouting around Africa will continue, straining global supply chains.

Insurers have responded by raising premiums and tightening coverage. Marsh McLennan said war risk exclusions, including for the Red Sea, were added to reinsurance programmes before the 2024 renewal.