A $10 billion loss for Egypt: what’s happening to the world’s main maritime artery
18 March 06:42
Egypt has suffered significant financial losses due to a sharp decline in shipping traffic through the Suez Canal. According to government estimates, revenue from one of the world’s most important transport corridors has fallen by approximately $10 billion. This is reported by CTS, as noted by [Komersant]
Why Suez Canal Revenues Are Falling
President Abdel Fattah al-Sisi stated that the country has lost “approximately $10 billion in Suez Canal revenue.”
The main reason for the decline in revenue was the security crisis in the Red Sea, which forced many international shipping companies to change their routes and avoid passing through the Suez Canal.
According to the Egyptian president, the losses amount to about 500 billion Egyptian pounds.
Despite this, the canal administration states that ship traffic is formally continuing as usual and navigation services are provided around the clock.
The decline in revenue is confirmed by international estimates
According to the International Monetary Fund’s forecast, the Suez Canal’s revenue in the 2024–2025 fiscal year could amount to approximately $3.6 billion. This is about 45% less than in the previous fiscal year, when revenue reached $6.6 billion.
According to Egyptian authorities, the canal’s revenues in 2024 fell by more than 60% compared to 2023.
For comparison:
- in the 2022–2023 fiscal year, the channel generated $9.4 billion
- the year before — about $7 billion
- in 2023, revenues were expected to exceed $10 billion.
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Shipping companies are changing routes
Due to the risk of attacks in the Red Sea, major logistics companies have begun to review their routes.
Specifically:
- Maersk and Hapag-Lloyd have begun gradually returning to the region
- CMA CGM has again decided to choose alternative routes
- Some carriers are rerouting ships around the Cape of Good Hope.
This significantly extends delivery times and increases transportation costs.
The crisis in the Red Sea and attacks on ships
The security situation in the region has deteriorated since Yemeni Houthi attacks on merchant ships began in November 2023.
Since then:
- over 100 commercial vessels have been attacked
- four ships have been sunk
- one was seized
- at least eight sailors have been killed
The U.S. Navy has also warned of increased risks to shipping in the region.
How the situation affects the global economy
The Suez Canal is one of the world’s key trade routes, through which a significant portion of global shipments between Europe and Asia pass.
A reduction in traffic could affect:
- global logistics chains
- freight rates
- energy costs
- delivery times
The situation remains unstable, and the security situation in the region does not yet allow for a full restoration of previous shipping volumes.
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