CMA CGM Scraps Red Sea Plans for Asia-Europe Trade; Xeneta Warns of Supply Chain Unpredictability

CMA CGM has announced a return to Cape of Good Hope routings for Asia-Europe trades, reversing its recent decision to transit the Red Sea. Experts from Xeneta warn that this constant shifting creates instability for shippers, eroding trust in schedule reliability and increasing inventory management risks.

cma-cgm-container-vessel

In a surprise move disrupting the plans of many shippers, carrier CMA CGM has announced that its FAL1, FAL3, and MEX services connecting Asia and Europe – which had recently begun transiting the Suez Canal on backhaul voyages – will revert to routing via the Cape of Good Hope.

Explaining this reversal, the French carrier cited "the complex and uncertain international context."

Instability Erodes Confidence

This decision immediately drew warnings from market analysts regarding its negative impact on shipper sentiment. Destine Ozuygur, Senior Market Analyst at Xeneta – the ocean and air freight intelligence platform – observed: “Shippers crave predictability in supply chains. Carriers taking the decision to return to the Red Sea then reversing that decision - even if it is done for important safety reasons - still risks undermining confidence in schedule reliability and eroding trust in partnerships.”

Latest data from Xeneta shows that full loop transit times on the FAL1 service – connecting China and Singapore to six European ports, including two calls at Southampton – had dropped from 105 days to 98 days when vessels began transiting the Suez Canal again. The service also recorded a reduction of one vessel slot.

The Paradox of Safety

However, time benefits have now morphed into concerns over disruption. Ozuygur emphasized:

“Unpredictability is toxic for supply chains. Shippers want certainty over when containers arrive at port, even if that means longer transit times around Cape of Good Hope.”

The expert also pointed out a paradox in CMA CGM’s strategy: “Ironically, CMA CGM’s decision to play it safe and return services via Cape of Good Hope may lead shippers to perceive them as the riskier choice against their peers.”

This comparison becomes starker when placed alongside Maersk's recent moves. Ozuygur analyzed: “What if a shipper paid a higher freight rate for the FAL1 or MEX service due to faster transit times through the Suez Canal, only to find shipments are moved back a week? There is also irony in CMA CGM – previously the most pro-active major carrier in returning the Red Sea - taking a backward step just a few days after Maersk - generally the most risk averse carrier - announcing its MECL service will begin transiting Suez Canal again. It typifies the unpredictability shippers must deal with.”

Risk Spreading to Other Routes

Xeneta warns that this instability could spread to other services and carriers. This includes CMA CGM’s INDAMEX service, which is currently still scheduled to transit the Suez Canal on both fronthaul and backhaul legs.

Data indicates that transit times from Port Qasim in Karachi to New York on the INDAMEX route dropped from 40 days to 36 days after returning to the Suez Canal in January.

Ozuygur noted: “There has not been a CMA CGM announcement on the INDAMEX service, but shippers will look at the decision on FAL and MEX services and fear containers will be arriving later than planned.”

The issue extends beyond vessel schedules, directly impacting warehousing costs and logistics management: “Do shippers plan for a transit time of 40 days or 36 days? What impact does this have on warehousing or detention and demurrage fees? Multiply this uncertainty across all services and carriers and the risk of widespread disruption becomes clear.”

See more: