As global shipping companies assess the likelihood of Red Sea transit resuming, Supal Shah, CEO of Serjak Container Lines, says the real question is not whether the industry will bounce back, but how quickly. The speed of this return will determine whether the market experiences a rate crash or more regular stability.
Also Read: Suez Canal Returns Amid Red Sea Security Improvements
Serjak Container Lines offers services in and out of the region, providing a first-hand view of conditions on the ground and evolving sentiments among ship operators.
A temporary pause does not guarantee lasting stability
While reports of reduced attacks are encouraging, Shah notes that the situation is fragile and highly contingent. Previous pauses have been short-lived, and current insurance assessments reflect continued risk.
“From our operational experience, a temporary reduction in incidents still does not equate to safe and reliable transit. The region has not demonstrated the sustained stability that crews, insurers and operators need,” Shah said.
War risk premiums increase significantly. Immediate, industry-wide returns are unlikely until the risk classification changes.
If the shipping lines return quickly: market shock is possible
A rapid return to the Suez route would shorten the travel distance abruptly and return a large amount of capacity to the global system. According to Shah, such a sudden change can cause:
- Increase in excess tonnage in major East and West trades
- Rapid downward pressure on shipping and charter rates
- Increased risk of empty ships, idleness and slow steam
- Potential program disruptions when networks are set up too quickly
“The industry is entering a period where supply is greater than demand,” Shah said. “A rapid return could accelerate rate erosion and destabilize markets as they seek equilibrium.”
If the return is gradual: a more stable path
In contrast, a phased return, driven by continuous security improvements, lower war-risk costs, and operational planning, allows the system to re-equilibrate in a controlled manner.
Such a scenario enables operators to:
- Restore Suez routes in stages, avoid sudden capacity shocks
- Recalibrate the feeder grids and port rotation slowly
- Protect charter markets from sudden rate fluctuations
- Maintain a more predictable equipment flow for shippers
“Measured and sequenced returns support consistency throughout the supply chain,” said Shah. This gives operators, ports and customers time to adapt rather than react.”
Operational structures cannot be shifted overnight
Shah emphasized that global networks have been reconfigured for nearly a year. Alliance rings, storage strategies and transportation patterns around the Cape of Good Hope have been redesigned.
“Even if conditions improved tomorrow, the industry would still need weeks or months to open the emergency networks that are now in place,” he said. Operators need lasting reassurance before making another major structural change.
Shah likened the situation to an important bridge that has been unsafe for a long time:
If engineers declare a damaged bridge “temporarily safe,” most drivers don’t immediately turn back. They await enhanced inspections, lifting of weight restrictions, to prove the structure. Otherwise, the risk of another closure outweighs the benefit of convenience.
Conclusion: not “if” but “how soon”
The king concluded that the Red Sea’s importance to world trade warranted its eventual full reopening. Now the question is the speed and the consequences that will follow.
“The Red Sea will open to traffic on a large scale, no doubt. But the speed of the return will determine whether the industry experiences renewed volatility or a more moderate adjustment. A rapid return exacerbates the oversupply cycle. A phased return provides a healthier and more sustainable business path.”
“Based on what we are seeing through our operations in the region, decisions continue to be guided by caution. The sustained and demonstrated stability will ultimately dictate the speed of the industry’s recovery.”
About Serjak container lines
Serjak Container Lines Pvt Ltd. is a global project logistics specialist, established in 2003, offering ODC, OOG, breaking, heavy haulage and transshipment solutions through its fleet of dedicated equipment and the multipurpose vessel, SCL Mercury.
With a strong international network covering more than 84 countries and more than 275 port cities, the company ensures safe, efficient and end-to-end transportation of complex cargo worldwide. Known for its technical expertise, customer focus and future-oriented mindset, Serjak Container Lines continues to provide reliable, scalable and high-performance logistics solutions for sectors such as renewable energy, oil and gas, engineering, infrastructure, power, manufacturing and various other industries across global markets.
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