With shipping volumes through the Red Sea now at record lows, ocean carriers are expected to continue rerouting vessels around Africa's Cape of Good Hope well into the peak shipping season starting in August. 

Supply chain visibility platform Project 44 estimates that passages through the Suez Canal dipped by 80% between May 2023 and May 2024, as Houthi rebel attacks have effectively stalled shipping through the region for months. That's forced carriers to opt for lengthy reroutes, adding a median of 10-14 days of transit time for vessels from China to Europe, Southeast Asia to Europe, and Southeast Asia to the U.S. East Coast. 

"These transit times represent the new normal as carriers continue to avoid the Red Sea," Project 44 said in a report published on June 21. 

This is expected to persist as we head into the peak shipping season spanning August-October, when consumers typically bump up their spending ahead of the holidays. Project 44 notes that lessening drought conditions at the Panama Canal have provided some relief for U.S. carriers looking for other route options, "but Europe in particular continues to feel the full force of vessels being unable to pass through the (Suez Canal)." 

Houthi rebel attacks have also continued to escalate in recent weeks, with the latest assault on June 23 occurring on the edge of the Gulf of Aden, well outside the area of previous incidents, according to the Associated Press. Houthis also hit the MV Tutor — a coal carrier flying the Liberian flag — with two missiles on June 12, marking the second ship the group has sunk in the Red Sea.