Good morning, folks. The news cycle slowdown continues as we inch closer to the new year, leaving us with a brisk read this morning.

In our top story today, we take a look at a perfect storm scenario for the global shipping industry, as it braces for a possible supply glut by 2027 amid an expected record-breaking wave of new ship deliveries coinciding with a potential full-scale return to the Suez Canal.

Why does it matter? If carriers trade the current long-haul routes around Africa for the shorter Red Sea transit just as fleet capacity hits an all-time high, Bimco warns we could see a 10% drop in global ship demand.

ALSO- We take a dive into Saudi’s play to dominate the regional data center market by leveraging its low-cost solar power and land resources, as well as pushing for new trans-continental connections that bypass the Red Sea and Egypt’s bottlenecks.

Watch this space

SHIP REPAIRS — Is Egypt making a USD 200 mn play for local ship repair? A consortium of local and foreign private-sector players, led by the Transport Ministry, is planning to deploy USD 200 mn into building a ship repair and construction hub at Damietta Port, Chamber of Engineering Industries Shipbuilding and Repair head Ibrahim El Desouki told Al Boursa. The project aims to be fully operational within three years once construction begins.

Why it matters: This isn’t just about building docks — it’s a strategic push to capture some of the high-margin MRO (Maintenance, Repair, and Overhaul) spend of the 26k+ vessels transiting the region annually. Currently, most major repairs bypass Egypt for more established yards in the Mediterranean and Red Sea, Desouki added.

DATA POINT- Global demand for ship-building and repair services is projected to surge 7% annually over the next decade. Meanwhile, Egypt is looking to grow its local shipbuilding and repair sector to a value of USD 500 mn over the next five years.

SHIPPING — More CMA CGM ships brave the Red Sea route:

Two containerships operated by logistics giants CMA CGM have transited through the Suez Canal outside of fixed schedules, in yet another signal that the French shipping giant is serious about its return to the Red Sea route. The move comes after the company rerouted its India America Express back to the Red Sea earlier this month.

BUT- It’s too early to say it’s a full comeback. This isn’t a return to normalcy just yet, with carriers rather testing the waters with limited transits as calm builds up. However, the threat profile from the Houthis has remained high, especially as a fragile ceasefire in Gaza makes conditions unpredictable, EOS Risk’s Martin Kelly told EnterpriseAM.

Market watch

Oil prices remained largely unchanged this morning after a five-day rally driven by robust economic data from the US and concerns of a supply crunch, Reuters reports. Brent crude futures shed USD 0.01 to trade at USD 62.37 / bbl as of 03:26 GMT, while US West Texas Intermediate (WTI) rose USD 0.01 to USD 58.39 / bbl.

Baltic index remains on a downward spiral: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 4.5% to 1,889 points on Tuesday. The capesize slipped 6.2% to 3,337, while the panamax index dipped 1.3% to 1,266 points, and the smaller supramax index eased by 31 points to 1,162.

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