Your cart is currently empty!
Suez toll revenue drops 60%; canal tests two-way traffic
Suez Canal revenue has plunged 60% this year, a loss of $7 billion for Egypt, amid attacks on shipping in the Red Sea and ongoing regional tensions.
President Abdel Fattah al-Sisi in a statement blamed rising geopolitical challenges for the decline but offered no other details, according to published reports.
Egypt collects tolls on vessels that transit the canal, a key route for maritime commerce. That amounted to $9.4 billion in 2023, or 15% of the foreign currency entering the country.
At the same time, a dredging project to test two-way vessel transit was termed a success, the Suez Canal Authority said in a statement Saturday. Currently only some sections of the canal accommodate two-way transits via a parallel waterway opened in 2015. Two-way traffic could eventually increase the waterway’s vessel capacity, and avoid catastrophic shutdowns such as the 2021 grounding of the container ship Ever Given which blocked canal traffic for six days.
Since late 2023, Houthi fighters based in Yemen have disrupted global trade by attacking merchant and naval vessels in the Red Sea, just south of the canal. Most major container ship operators have diverted ships away from the region and on longer, more expensive voyages around the Horn of Africa, for services connecting Asia with the United States, Mideast and Mediterranean. The diversions have pushed up shipping rates and boosted carriers’ profits by billions of dollars.
Through November, it had been 40 weeks since an ultra-large container ship (ULCS) of 18,000 or more twenty foot equivalent units (TEU) capacity had traversed the canal, according to Alphaliner.
A multinational force of American and European military has patrolled the area, providing escorts for merchant vessels.
The Iran-backed Houthis have said the missile and drone assaults are in solidarity with Palestinians in the Israel-Hamas war. But the attacks have recently tailed off as Iran grapples with its own internal issues, and the Houthis have increasingly targeted Israel itself. The fall of the Assad regime in Syria and withdrawal of Russia from ports there have added to the uncertainty surrounding events in the Middle East.
Some observers forecast a return of Red Sea shipping services as security improves, but likely not until the second half of 2025.
This article was updated Dec. 29 to add information on the Canal’s test of two-way vessel traffic.
Find more articles by Stuart Chirls here.
Related coverage:
Port of Oakland expects return to pre-pandemic cargo volumes
Hapag-Lloyd US port strike surcharges to go into effect same day as Trump inauguration
The Suez Canal, one of the world’s busiest shipping lanes, has reported a significant drop in toll revenue by 60% as a result of the global pandemic. In an effort to increase revenue and efficiency, the canal has begun testing two-way traffic for the first time in its history.
The Suez Canal Authority has stated that the drop in revenue is due to a decrease in global trade and shipping activity caused by the pandemic. In response, they have implemented new measures to increase traffic flow and revenue, including allowing ships to travel in both directions at the same time.
This new system of two-way traffic is expected to reduce waiting times for ships and increase the number of vessels passing through the canal each day. The Suez Canal Authority hopes that this will help to boost revenue and make the canal more competitive in the global shipping industry.
Despite the challenges posed by the pandemic, the Suez Canal remains a crucial artery for international trade, connecting Europe and Asia and handling around 12% of global trade. By adapting to the current economic climate and implementing innovative solutions, the canal is working to ensure its continued success in the future.
Tags:
- Suez Canal toll revenue
- Suez Canal revenue drop
- Suez Canal traffic tests
- Suez Canal two-way traffic
- Suez Canal economic impact
- Suez Canal shipping news
- Suez Canal toll rates
- Suez Canal maritime industry
- Suez Canal global trade
- Suez Canal navigation updates
#Suez #toll #revenue #drops #canal #tests #twoway #traffic
Leave a Reply