Suez Canal transits expected to resume before 2025 ends: Drewry Survey
EGYPT – Drewry reports that most shipping stakeholders anticipate transits through the Suez Canal will resume before the end of 2025, while concerns over escalating tariffs under U.S. President Donald Trump remain high, according to a recent survey.
Osama Rabie, Chair of the Suez Canal Authority, remains confident that shipping traffic will start picking up by late March, with a full recovery by mid-year if the ceasefire in Gaza holds.
“The majority of respondents (54 percent) agree with him and expect it to happen before the end of this year, with the next largest group (29 percent) opting for during 2026. Only two percent of respondents think that the current situation won’t be resolved before 2030.”
The reopening of the Suez Canal would significantly impact the global container shipping market, as noted by Simon Heaney, Senior Manager, Container Research, Drewry.
“We estimate that Red Sea diversions have reduced effective capacity in container shipping by approximately nine percent. Once that trapped capacity is back in the market, carriers face the prospect of falling freight rates unless they can adequately rebalance supply in another method.”
The Drewry report highlights how trade routes are closely linked to geopolitical tensions stating how the ceasefire deal between Israel and Hamas is extremely fragile, and Donald Trump’s involvement makes it even harder to predict.
Given the volatile situation, shipping companies remain cautious with the update further adding that it is unreasonable to expect shipping lines to put crew in the firing line of the Houthi rebels.
Trump tariffs and global trade
The survey covered over 300 respondents, with the majority (34 percent) being shippers, followed by 13.7 percent freight forwarders and 10 percent port authorities or terminal operators.
Respondents widely expect Trump to increase tariffs, with many predicting a rise in the U.S. effective tariff rate from 2.4 percent in September 2024 to between 5-10 percent by the end of this year.
“There was also a substantial number of people who picked higher, including 13 percent expecting the effective tariff rate to go beyond 20 percent, something not seen since the Great Depression era,” the report added.
When asked which trading partners are most likely to be affected, respondents named China (85 percent), Mexico (76 percent), Canada (73 percent), and the European Union (60 percent).
However, countries such as India (16 percent) and Vietnam (14 percent), which some hope would benefit from relocated shipments, were also seen as potential targets.
Panama Canal transits decline
Meanwhile, recent data from BIMCO indicates that ship capacity passing through the Panama Canal between September 2024 and January 2025 was 10 percent lower than the 2019-2022 average.
“Although there were no transit restrictions during this period, transits of dry bulk, LNG and, to a lesser extent, tanker ships have not recovered to their historical levels,” says Filipe Gouveia, Shipping Analysis Manager, BIMCO.
The decline follows restrictions imposed from June 2023 to September 2024 due to low water levels in Gatun Lake.
Container, LPG, and car carrier transits are already exceeding historical levels and are expected to grow, but dry bulk shipments face uncertainty due to competition between U.S. and Brazilian grain exports and weak coal demand.
Tensions between the U.S. and Panama have also surfaced, with President Donald Trump accusing Panama of ceding control of the canal to Chinese interests.
The U.S. State Department claimed on X that government vessels can now transit the Panama Canal without fees, saving millions of dollars annually.
However, the Panama Canal Authority refuted these claims. “The Panama Canal Authority is fully prepared to engage in dialogue regarding the transit of U.S. warships.”
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