Suez Canal revenue collapse underscores global shipping volatility
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Egypt’s Suez Canal — normally the fastest bridge between Asia and Europe — saw its earnings plunge 61 percent last year as container lines fled Red Sea danger zones. Revenues shrank to $3.9 billion in 2024, down from a record $10.25 billion in 2023, Ahram Online reported. The blow has rippled through Egypt’s balance of payments and raised questions about how quickly traffic can rebound once regional security improves.
Revenue and traffic in free fall
Through‑traffic halved. Only 13,213 ships used the waterway in 2024, compared with 26,434 a year earlier. Net cargo tonnage collapsed 66.5 percent to 525 million tons.
Monthly losses approach $800 million. President Abdel‑Fattah al‑Sisi said foregone canal tolls are now costing Egypt roughly that amount every month.Reuters
A faint uptick in early 2025. March data show vessels up 2.4 percent and toll income up 8.8 percent versus January, hinting that some carriers are edging back.
Even with the modest rally, first‑quarter revenue for Egypt’s 2024/25 fiscal year is running more than 60 percent below the same period a year earlier.
Why ships are avoiding the waterway
Security risks and insurance shocks
Since November 2023, Yemen‑based Houthi fighters have launched scores of drone and missile strikes on merchant vessels they link to Israel or its allies.War‑risk cover for transiting ships has soared, forcing many operators to detour around Africa’s Cape of Good Hope.
Detouring adds time and cost
Rerouting lengthens a Shanghai–Rotterdam round trip by roughly 3,500 nautical miles and ten days of steaming, erasing much of the canal’s traditional time advantage.UNCTAD estimates that the longer voyages, higher fuel burn and bigger premiums have more than doubled benchmark container freight rates since late 2023 and could nudge global consumer prices up 0.6 percent by 2025.
No durable substitute
SCA chairman Osama Rabie argues that “there is still no sustainable alternative route” to the 193‑kilometre canal; carriers will return once risks subside.
Domestic impact and government response
Expansion projects stay on course
Despite the revenue drought, the southern‑sector widening and dual‑lane upgrade have been finished, boosting daily capacity by six to eight ships and reducing current‑induced steering hazards. The Authority has also published maps for a 10‑kilometre extension near the Bitter Lakes that will further raise throughput.
New services and a greener canal
To diversify income and burnish its environmental record, the SCA has rolled out waste‑collection services for transiting vessels and is targeting “Green Canal 2030” status. Additional rescue, bunkering and crew‑change offerings aim to position the zone as a full‑service maritime hub.
Ripple effects for Egypt and global trade
Foreign‑currency squeeze. Canal tolls are one of Egypt’s three main hard‑currency earners alongside remittances and tourism; 2024’s shortfall exacerbates the country’s external‑financing gap.
Supply‑chain costs. Longer voyages have tied up vessels and equipment, contributing to late‑2024 spikes in container and tanker charter rates and prompting some shippers to rebuild safety stocks.
Carbon setback. The Cape detour adds roughly 2,000 tonnes of CO₂ per container ship roundtrip, diluting carriers’ decarbonisation efforts.
Outlook: what can change the tide
Security assurances. Industry executives say sustained naval escorts or a diplomatic breakthrough in Yemen would be the quickest route to normal traffic levels.
Freight‑rate economics. If Red Sea surcharges stay high while demand in Europe softens, carriers may find it profitable to return sooner rather than later.
Capacity additions. Once the Bitter Lakes extension is operational, the canal could handle 90–95 ships per day, giving operators more scheduling flexibility when they do come back.
In the meantime, the Suez Canal Authority is trying to prove that the waterway is not just open but evolving. Whether that message outweighs security fears will determine how fast Egypt recovers the $7 billion hole punched in its 2024 earnings.