Incentives for major shipping companies boosted Suez Canal global standing: CMC

Al-Ahram Weekly

6 days ago

​The Egyptian Cabinet Media Center (CMC) underscored Monday that the Suez Canal has regained its global stature, supported by strong incentives offered to major international shipping companies, as confirmed by international institutions.
In a statement, the CMC noted that international institutions have a positive outlook on the Suez Canal's performance.
According to the statement, the International Monetary Fund (IMF) projects Canal revenues to increase by 88.9 percent over five years—from an expected $6.3 billion in 2025/2026 to $11.9 billion in 2029/2030—with estimated revenues of $8.2 billion in 2026/2027, $9.9 billion in 2027/2028, and $11.5 billion in 2028/2029.
In this context, the CMC stated that the Suez Canal's regained position reflects growing international confidence in its ability to meet global challenges.
Major institutions have praised its flexibility and unmatched maritime services. At the same time, the Suez Canal Authority has actively introduced a range of incentives and facilitations to attract leading shipping lines, enhancing its competitiveness as a safe and efficient navigation corridor amid rapid changes in global trade dynamics, according to the statement.
According to Offshore Energy Magazine, which focuses on the maritime and offshore energy industries, the Suez Canal has continued its operations despite the crisis in the Red Sea. It is now offering a range of new maritime services, including marine rescue, water ambulance services, pollution control, ship maintenance and repair, and fuel supply.
S&P Global also expects a gradual return to regular navigation traffic in the coming months, read the cabinet's statement.
Fitch Solutions noted that the Suez Canal expansion, effective in Q1 2025, has increased capacity by 6 to 8 additional ships per day and improved its potential emergency response, with traffic recovery forecast for the current fiscal year.
In the same context, British maritime publication Lloyd's List reported that several major shipping companies have resumed Red Sea routes amid improved security, highlighting the Suez Canal Authority's active role in incentivizing a full return to canal transits.
Regional disruptions, gradual return
In May, Suez Canal Authority (SCA) Chairman Osama Rabie stated that the security situation had improved, allowing for a gradual return of vessels to the Canal.
He noted that the unprecedented security tensions in the Red Sea had negatively affected navigation rates, forcing many shipping lines to reroute via the Cape of Good Hope, resulting in longer sailing times, higher operational costs, and broader impacts on global inflation and end-consumer prices.
The Red Sea crisis has demonstrated the indispensability of the Suez Canal, as it alone offers a unique combination of time efficiency, cost savings, and vital maritime and logistical services that the Cape of Good Hope route lacks.
The severe disruption to Suez Canal traffic has been driven by Houthi attacks on vessels they accuse of links to Israel in the Red Sea and Gulf of Aden, carried out in solidarity with Palestinians amid Israel's war on Gaza, forcing many vessels to reroute via longer alternatives, such as the Cape of Good Hope.
In April, Chairman Rabie stated that the number of ships passing through the Suez Canal during the first quarter of 2025 decreased by nearly 50 percent.
In March, President Abdel-Fattah El-Sisi stated that Egypt was losing around $800 million per month in Suez Canal revenues due to ongoing regional tensions.
In 2024, revenues from the canal declined sharply by 60 percent, with losses amounting to $7 billion.
Despite the disruptions, navigation through the Suez Canal is gradually recovering, with several vessels resuming transit in late 2024 and throughout 2025, read the CMC statement.
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