While vessels are expected to resume their regular routes after recent diversions from the Suez Canal, analysts anticipate a potential 9.5% increase in ship demand this year.According to Niels Rasmussen, chief analyst at Bimco, ship supply is expected to grow on average by 9.1% in 2024 and 4.1% in 2025. “The supply and demand balance is expected to tighten in the first half of the year as attacks on ships in the Red Sea increase sailing distances and demand for ships,” he said.With vessels still avoiding the Suez Canal and opting for the longer route via the Cape, it remains to be seen exactly when the situation will change. However, Rasmussen said as it was impossible to predict how long the situation would last, they had opted in their latest Container Shipping Market overview and outlook to assume that vessels would revert to standard routings in the second half of the year with demand expected to weaken then.“It goes without saying that should ships be forced away from the Red Sea and the Suez Canal for longer, then ship demand will increase accordingly,” he said.After eight consecutive days of attack-free shipping in the Red Sea, between March 23 and April 1, marking the longest quiet streak since December, when container ships began diverting around the Cape, hopes were high that the situation was nearing an end. However, by April 8, UK Maritime Trade Operations (UKMTO) confirmed that at least two attacks on vessels had occurred. In the meantime, Houthi rebels have reportedly announced their intentions not only to increase attacks but also to expand their activities into the Arabian Sea.With 30% of global container trade passing through the Suez Canal, the Red Sea shipping crisis is upending supply chains. Since December, hundreds of vessels have been forced to reroute around southern Africa – a detour of more than 6 000km, adding 10% to average sailing distances and ship demand.“Due to the longer sailing distances, we expect that sailing speeds will remain stable in 2024 but fall again in 2025,” Rasmussen said, indicating the attacks on merchant ships in the Red Sea, resulting in vessels choosing not to use the Suez Canal, were much more significant than trade and economic developments.Looking at global growth, the International Monetary Fund (IMF) estimates the world economy will grow slightly faster in 2024 and 2025 than in 2023, even though economies in the United States, China, Japan and India are expected to grow more slowly.
