Suez Canal Recovery Cuts Indian Export Freight Costs

Container transits have recovered to over half of pre-disruption levels, reducing shipping times and costs for trade with Europe and the US.

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Container-ship tonnage through the Suez Canal increased by 54.2 percent in the first eight months of 2026, marking a significant recovery from Red Sea disruptions.
Indian exporters report falling freight rates and shorter transit times to European ports, though benefits for US routes remain limited.

Container-ship tonnage transiting the Suez Canal during January and August 2026 was 54.2 per cent higher than in the same period last year, according to the Suez Canal Authority. This recovery marks the first time since the Houthi attacks in 2023 that weekly transits have surpassed half of pre-disruption volumes, as reported by The Hindu BusinessLine. Clarksons Research data indicates that weekly container ship capacity averaged 753,000 TEU in the first two weeks of October, compared with 1.457 million TEU in the corresponding period of 2023.

The revival of the shipping corridor has accelerated following routing announcements by major alliances. The Gemini Alliance, comprising Maersk and Hapag-Lloyd, announced services via the canal in July, while Ocean Alliance, Premier Alliance and MSC also adjusted their routes. This timing coincides with increased goods movement ahead of year-end festive seasons in the US and Europe. The initial disruption began in November 2023 when Houthi forces targeted ships in the Red Sea, forcing diversions around the Cape of Good Hope.

For Indian businesses, the return to the Suez route offers tangible economic benefits. Ramu Shanmugam, CEO of Clothing Connections, noted that shipping costs from Tuticorin to Antwerp and Rotterdam now stand at $2,350–2,450 per 40-foot container. This is a sharp drop from the $6,100–7,000 peak rates recorded in July. Transit times from Chennai to Rotterdam have also improved to 23–24 days, down from 34–36 days when ships took the longer Cape route. Shanmugam added that exporters to Europe and the UK have seen costs drop by $400–600 per container over the last three weeks.

Research cited by The Hindu BusinessLine indicates that a round trip via Suez saves approximately 7,833 nautical miles and 27 days compared to the Cape of Good Hope route. Drewry estimates that this shorter path saves about $1 million per round trip for a 24,000-TEU vessel, or roughly $43 per slot. However, J Krishnan of Natesa Iyer, a Chennai-based freight forwarder, said the selective use of the Suez route provides a "sigh of relief" to export trade plagued by high costs. Shanmugam cautioned that shipments to the US East and West coasts have yet to see comparable benefits, with further softening in European rates expected through November.

Suez Canal Traffic Surges, Lowering Freight Costs for Indian Exporters

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