Egyptian officials and major shipping lines are in discussions about resuming transit through the Suez Canal. This follows a period of significant disruption that caused many carriers to divert their vessels away from the vital trade route.
Efforts to Restore Confidence and Revenue
Ossama Rabiee, chairman of Egypt’s Suez Canal Authority (SCA), recently met with representatives from 20 shipping lines to address the impact of Red Sea developments on global trade. The meeting aimed to find solutions after a sharp decline in canal traffic and revenue.
Key points from the situation include:
- Revenue Impact: Attacks on merchant ships by Houthi militia in Yemen forced major cargo lines to take longer, more expensive routes around Africa. This led to a plunge in Suez Canal toll revenues, which were down as much as 60% in 2024 from a record $10.25 billion in 2023.
- Incentives for Carriers: To attract carriers back, the SCA introduced a 15% discount on tolls for large container ships in May 2024.
- First Quarter Recovery: Despite the annual drop, revenue showed signs of improvement in the first quarter of this year, reaching $899 million—a 16% increase from the same period last year.
A Gradual Return to Normalcy
Recent signs indicate a positive shift in regional stability, encouraging a slow return of vessel traffic. The ceasefire talks in Gaza during October have been credited with helping to calm tensions.
October saw the highest number of vessels returning to the canal since the crisis began, with 229 ships resuming transit. This brought the total from July to October to 4,405 vessels. Notably, CMA CGM, one of the few global carriers to maintain some services through the Red Sea, recently sent its 17,859-TEU Benjamin Franklin through the passage—the largest vessel of its kind to do so in two years.
Industry Leaders Weigh In on the Future
During the summit, shipping executives expressed optimism about a return to the Suez Canal, viewing it as an irreplaceable route.
- Tariq Zaghloul, CEO of CMA CGM’s Egypt business, stated there is no viable alternative to the canal and anticipates an increase in the group’s voyages.
- Ehab El-Bannan, Chairman of British shipbroker Clarkson, suggested that incentives tied to vessel numbers and tonnage could further boost transits, expecting a “significant breakthrough” in the new year.
- Major carriers like MSC and Evergreen have indicated they are ready to resume full transit as soon as the region stabilizes permanently.
Representatives from COSCO noted that structural changes in the maritime industry, including falling rates and shifting supply and demand, will likely spur carriers to return to the more efficient Suez Canal route. The ongoing dialogue and improving regional stability signal a promising path forward for one of the world’s most critical maritime corridors.