Return to Suez will be Gradual, Hapag-Lloyd CEO Says

There is no specific timeline for when the shipping industry will resume sailing through the Suez Canal, but any return would be gradual, the chief executive of Hapag-Lloyd, the world's fifth-largest container company, said on Thursday.

Shipping companies have been sailing costly routes around Africa since November 2023 to avoid attacks on commercial vessels in the Red Sea by Yemen's Houthi militants, who said they were acting in solidarity with Palestinians over Israel's war in Gaza.

Hapag-Lloyd and bigger rival Maersk stressed caution last week on a possible return strategy following a ceasefire deal in October aimed at ending the two-year Gaza war, saying they were monitoring the situation for evidence of increased security.

"No date is set (for a resumption), and once it comes it will be gradual," said Hapag-Lloyd CEO Rolf Habben Jansen in an online call with customers, adding there would be a transition period of 60 to 90 days to adjust current logistics and avoid sudden port congestion.

"We will inform people as soon as we have news on that," he added.

Hapag-Lloyd and Maersk formed the Gemini network earlier this year, a collaboration to cut their shipping costs and improve schedule reliability.

Habben Jansen said that demand in November had been encouraging, following a weak October, when export volumes declined especially out of China.

"When I look at the last four weeks, bookings have been really strong," he said.

The company last month reported a 50% drop in nine-month net profit and lowered the top end of its full-year earnings forecast, blaming volatile markets.

Habben Jansen reiterated a pledge to be strict on costs.

"We have a plan to take a significant chunk of costs out over the next 12 to 18 months. I also think that within the Gemini set-up, we will further improve," he said.

(Reuters - Reporting by Vera Eckert; Editing by Joe Bavier and Emelia Sithole-Matarise)