Decline in Suez Canal Earnings: 46% Drop in January Compared to Last Year

Osama Rabie, the Chairman of the Suez Canal Authority, stated that the revenues of the canal decreased in January by 46 percent, on an annual basis, from 804 million dollars to 428 million.

In television statements, Rabie added that 1362 ships crossed the canal in January of this year, compared to 2155 ships in January 2023, a decrease of 36 percent, indicating that this is the “first time the Suez Canal has experienced a crisis in this way.”

Rabie continued, “We have held many meetings with navigation authorities and companies to find a solution to the crisis the Suez Canal is going through.”

He said, “From our meeting with them, they all agreed that the Suez Canal route is the best, shortest, and safest among all maritime routes and that the Cape of Good Hope route is an unsustainable shipping route and is not suitable to be so.”

Rabei indicated that ships are delayed by 12 to 15 days depending on the speed of the ship and weather conditions due to alternative routes being taken and not passing through the Red Sea and Suez Canal, which causes significant problems in global supply chains.

Rabei said that the problem of the Suez Canal affects the entire world, not just Egypt. He added, “I expect that the traffic through the canal will increase rapidly after the current conditions are over in order to compensate for supply chains.”

The International Monetary Fund recently issued a report warning about the escalating tension in the Red Sea region and its impact on trade and shipping costs.

In a report that included an update on the economic outlook for the Middle East and North Africa region, the fund stated that several major shipping companies have shifted their shipments to alternative routes following attacks on ships by drones in the Red Sea and the Gulf of Aden.

This could potentially have consequences on global supply chains and the trading of primary goods, as well as lead to increased insurance costs.

The fund stated that in addition to that, shipping costs can rise further if the tension continues, as well as the fact that shifting shipping companies’ larger parts of their trade to longer alternative routes could increase fuel and operating costs.