EGYPT cut fees for some vessels crossing the Suez Canal, seeking to revive the critical trade route after the US agreed to a ceasefire with Yemeni militants attacking Red Sea shipping.
Container ships with a net tonnage of at least 130,000 tons, laden or empty, will be able to pay 15% less for a period of 90 days, the Suez Canal Authority said Tuesday.
The move, effective May 15, aims to encourage shipping lines to return to the canal given the relative stability in the Red Sea region, the SCA said in a statement.
Restoring traffic flows to the shortest route between Asia and Europe is key for Egypt, whose revenue from the waterway has plunged by more than half amid more than 18 months of Middle Eastern conflict. President Abdel-Fattah El-Sisi in December put the losses at about $7 billion.
The Iran-backed Houthis in Yemen have been targeting vessels in the Red Sea since late 2023, in solidarity with Palestinian group Hamas as it battles Israel in Gaza. That forced many global shipping firms, including A.P. Moller – Maersk A/S and Hapag-Lloyd AG, to avoid the canal. Both Hamas and the Houthis are designated terrorist organizations by the US.
US President Donald Trump last week announced he’d ordered a halt to his bombing campaign against the Houthis after they agreed to stop attacking US warships and commercial vessels. The Houthis appeared to confirm the Oman-brokered agreement, though made clear aggression against US ally Israel would continue.
Daily transits via the Suez Canal averaged 34 vessels last month compared with about 77 in April 2023, according to figures from PortWatch.
When or whether shipowners will return to the canal in pre-war volumes remains unclear, particularly as the durability of the US-Houthi truce is largely untested. Maersk Chief Executive Officer Vincent Clerc said last week he thought the region was “pretty far” from being safe for ships for the foreseeable future.
Crossings are down an annual 50% over the past year, with revenue about 60% lower, SCA chief Osama Rabie told an Egyptian TV channel on Monday evening.
Rabie said he recently met with representatives of 25 shipping lines and maritime agencies who’d requested temporary incentives to help offset increased insurance costs for vessels operating in what they deem a high-risk zone.
“They are waiting for the day they will be able to return to the Red Sea and the canal, but there’s still the worry that a ship will be hit or someone will be injured,” Rabie said on Sada ElBalad, a privately owned broadcaster. “They want more reassurance.” –BLOOMBERG
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