Red Sea ceasefire: A wait-and-watch moment for breakbulk shipping

Fierce competition from container lines will have a limited impact on the General Cargo segment, as these vessels often carry cargo which is better suited for dry cargo vessels than containers. However, a full return of vessels via the Suez Canal could increase the competitiveness as transit times shorten and network efficiency improves across all segments. 

When it comes to project cargo, container lines are competing for this business, particularly when they have excess slot capacity available. A common arrangement involves loading a single large project around mid-ship, secured on a series of flatrack containers.

A similar pattern is emerging in the dry bulk sector. For instance, Vestas has indicated that it regularly uses Handy and Supramax bulk carriers to move lighter project cargo on their open top decks. At the same time, the reduction in tonne-miles on this route could offer some relief to shippers in terms of time charter rates.

General Cargo vessels were less impacted by the Red Sea crisis that began in November 2023 because they rely less on that route. However, a complete reopening of the Suez Canal will shorten voyages and lower transportation costs. As operations normalise, these carriers might need to revise their services, port calls and schedules to regain the efficiency seen before the crisis.

Project Carriers were the most impacted by the Red Sea crisis due to their high-value, time-sensitive cargoes and the need for extensive rerouting. If the route fully reopens, particularly with strong breakbulk demand in sectors like infrastructure and energy, the capacity freed by shorter Suez transits is likely to be absorbed by the growing demand for these goods. Initially, this could put downward pressure on charter rates due to lower vessel utilisation; however, sustained demand for heavy-lift cargo is expected to keep rates at profitable levels for vessel operators.