Plans to end the war in Gaza are expected to help global shipping traffic through the Suez Canal gradually recover in 2025, the waterway’s chief said.
The ocean route for container ships and tankers has seen traffic drop by as much as 60% in recent months as Yemen-based Houthi rebels resumed attacks on merchant shipping in the Gulf of Aden and Red Sea.
Major international carriers in early 2024 began diverting scheduled services connecting Asia to the United States, Mediterranean and Europe away from the region on voyages via the Cape of Good Hope around the Horn of Africa, adding as much as two weeks to some services.
The Suez Canal Authority saw toll revenues crash by more than 60%, or $6-$7 billion, in 2024 following record revenues of $10.25 billion in 2023.
Ocean lines and their insurers deemed the Red Sea route too unstable after attacks by Houthi militia forced a restructuring of global shipping that added billions of dollars to liner operators’ profits, but caused a ripple effect through terminals, ports and the global supply chain that continue to be felt today.
Osama Rabie, chairman of the Suez Canal Authority, anticipates a gradual normalization of ship passage this year, as negotiators for Hamas and Israel met in Egypt for indirect talks aimed at ending the two-year war in Gaza.
The Suez crisis is acutely felt in Egypt, where canal tolls account for 15% of foreign currency income and 10% of gross domestic product. While Cairo posted a recent budget surplus mostly from outside tax sources, the spectre of a reduction in domestic services is a source of anxiety in a region marked by widespread instability, including in Syria and Iran.
At the same time, China successfully tested a trans-arctic ocean route that could cut as much as 18 days off a typical voyage, raising the tantalizing possibility of time-sensitive delivery for ocean shipments originating in that region.
Rabie said a statement by the Houthis indicating that they would no longer attack Western ships, amid a ceasefire between Israel and Hamas, could speed up the restoration of shipping through the Suez Canal. An Oct. 2 cruise missile attack by the Houthis on a Dutch cargo vessel killed one crewman and injured another.
Just 32 ships per day pass through the canal on average, down from 75 prior to the war in Gaza. Supertankers, the authority said, hardly use the waterway.
Find more articles by Stuart Chirls here.
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