How Houthi Attacks on Red Sea Shipping Are Still Affecting the Suez Canal and Global Supply Chains

The Red Sea — one of the world's most critical maritime corridors — has faced sustained disruption since late 2023 when Houthi attacks on merchant vessels prompted mass rerouting. The fallout reshaped shipping schedules, elevated insurance costs, and tightened global container supply in ways that continue to affect ocean freight in 2026. For US buyers purchasing containers for domestic storage and commercial use, understanding what happened and what persists helps explain why the market has behaved the way it has — and what to expect going forward.

What Changed and Why It Matters

In the first two months of 2024, Suez Canal trade volume fell by approximately 50% year over year, according to IMF PortWatch data. Egypt's canal authority and international analysts documented steep declines in ship transits and revenue throughout the year. The IMF estimated Suez foreign-exchange inflows fell by roughly $6 billion in 2024 — a dramatic disruption to one of Egypt's primary revenue sources and to the global trade lanes that depend on the canal.

The trigger was a sustained campaign by Houthi forces in Yemen targeting commercial vessels transiting the Red Sea and Bab-el-Mandeb Strait. Major shipping lines began rerouting around Africa's Cape of Good Hope — adding roughly 3,200 nautical miles and approximately a week of transit time on typical Asia–Europe rotations. Some analyses documented Cape of Good Hope transits up approximately 74% in early 2024 compared with pre-crisis baselines, reflecting the scale of the diversion.

Rerouting via the Cape: The Scale of the Impact

A Shanghai–Rotterdam voyage via the Suez Canal typically covers approximately 10,500–10,600 nautical miles, taking three to four weeks depending on vessel speed and port scheduling. The Cape of Good Hope alternative adds roughly 3,200 nautical miles and seven or more days at typical liner service speeds — which is a meaningful addition to round-trip voyage time.

That extra week per voyage doesn't just delay individual shipments. It removes vessel capacity from circulation systemically: a ship spending an extra week in transit is a ship that can't load the next cargo that's waiting for it. Across dozens of Asia–Europe services each rerouting simultaneously, the aggregate effect is a significant tightening of effective global vessel capacity — which translates directly into higher freight rates and, with a lag, into tighter domestic used container supply in the US secondary market.

Measured Impacts Through 2024

• Suez Canal transit volumes dropped approximately 50% year over year in early 2024; annual canal revenue fell by an estimated two-thirds for the full year
• Cape of Good Hope traffic rose approximately 74% above pre-crisis baselines as services rerouted
• Monthly traffic snapshots in mid-2024 showed approximately 1,100 transits and canal receipts near $338 million — down sharply from prior-year levels
• Egypt's current account deficit widened as canal revenue collapsed, with the IMF documenting the macroeconomic damage in multiple reports

Knock-On Effects Across Intermodal Networks

Route deviations create layered effects beyond the immediate voyage cost. Longer round-trip times mean fewer containers cycling through loading ports per month — which tightens equipment availability. Inland depot and distribution center turn-times shift as Asia–Europe flows lengthen, creating inventory positioning effects at US ports that serve those trade lanes. Insurance war-risk surcharges on Red Sea legs add to shipper costs that eventually pass through to retail prices.

For US domestic container buyers, the mechanism works through the same supply pipeline described in the global disruption buyer impact guide: when ocean freight demand is elevated by route disruptions, fewer containers retire from ocean service into the domestic resale market. US depot inventory tightens, and used container prices firm. The Red Sea disruption was one of the more significant market-tightening events in the 2024 used container market in the US.

How Carriers and Shippers Have Responded

The response across the industry has involved several parallel adaptations:

• Structural rerouting: Many mainline services built the Cape diversion into their service design rather than treating it as temporary — planning voyages, vessel deployment, and port call sequences around the longer rotation
• Slow steaming and bunker management: Balancing fuel consumption against transit reliability on longer rotations
• War-risk insurance surcharges: Security premiums elevated on Red Sea legs, passed through to cargo owners via surcharges
• SCA pricing responses: The Suez Canal Authority offered targeted discounts to attract services back during the disruption period, though risk-adjusted economics continued to favor the Cape for many operators during elevated threat periods

What Persists in 2026

With security conditions in the region still variable, many mainline services have planned for continued structural variability. Shippers should expect rolling schedule adjustments, lane-specific surcharges, and longer buffers on time-sensitive freight that touches Suez-dependent trade lanes. Diversions are likely to ebb and flow with risk levels and insurance pricing rather than resolving cleanly.

For US buyers, the practical implications are two-fold. First, the tightening of US domestic used container supply that accompanied the 2024 disruption demonstrated how quickly global events can affect depot availability and pricing in the secondary market — a useful reminder that buying decisions made with some lead time are more favorable than buying under urgency. Second, the disruption accelerated the trend toward supply chain buffer inventory — businesses holding more on-site storage capacity to reduce exposure to shipping unpredictability. Container ownership as a strategic logistics asset rather than just a cost-minimization exercise gained ground during this period.

Practical Guidance for US Buyers

For businesses affected by Suez-related shipping delays on imported inventory — or for logistics-conscious buyers who want to reduce exposure to future route disruptions:

• Buffer lead times on Asia-origin imports. For goods that transit Asia–Europe or Asia–US routes that include or are affected by Red Sea capacity: build additional transit slack into planning cycles. The disruption demonstrated that the buffer time that seemed conservative before 2024 was not conservative enough.
• Consider on-site inventory buffering. Businesses that maintain a larger buffer of domestic inventory — housed in on-site storage rather than relying on just-in-time shipment arrival — are less exposed to shipping disruptions. A container at your location is inventory that's already arrived, independent of what's happening with ocean freight.
• Buy containers ahead of demand surges. The US domestic market tightens when global freight disruptions occur. Buyers who sourced containers during the 2024 period of elevated demand paid more and had fewer options than buyers who sourced during the quieter periods that preceded the disruption.

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