By Maria Kalamatas | The Logistic News – Cargo Section
Suez, Egypt – May 19, 2025
“We’re examining every possible measure to rebuild trust and bring traffic back through the canal.”
— Osama Rabie, Chairman, Suez Canal Authority
Traffic Tumbles Amid Security Concerns
The Suez Canal Authority is considering temporary discounts on transit fees, ranging from 12% to 15%, as part of a wider plan to reverse a sharp drop in cargo movement through the canal.
The drop in traffic follows a wave of attacks on merchant vessels in the Red Sea, where increased hostilities have turned the route into a high-risk zone for global shipping.
The violence, attributed to militant groups targeting vessels bound for Israel in support of Gaza, has led shipping companies to reroute cargo, drastically affecting the canal’s throughput. Official figures indicate that revenues fell from $2.4 billion in Q4 last year to just $880.9 million this quarter — a staggering loss for one of Egypt’s most critical economic pillars.
Canal at a Crossroads
Chairman Osama Rabie confirmed that the proposal is under review and would require presidential approval. He has also held consultations with global shipping agents who expressed deep concern over soaring insurance premiums and extended rerouting costs.
The Suez Canal plays a pivotal role in international logistics, connecting the Mediterranean to the Red Sea and providing the shortest maritime path between Europe and Asia. Its strategic importance makes any disruption particularly impactful, not only for Egypt’s economy but for the overall balance of global trade.
“Shipping firms are watching every risk variable right now — time, cost, security. If we don’t act, traffic won’t return,” one Cairo-based freight executive explained.
Global Implications for Cargo Routes
As more vessels avoid the Red Sea and turn toward the Cape of Good Hope, the shipping sector faces longer voyages, higher fuel costs, and cascading delays across multiple supply chains.
A fee reduction could offer temporary relief, but many industry experts warn that only restored maritime security will bring back full volumes. Meanwhile, insurers, port authorities, and carriers are bracing for an uncertain summer ahead.
The Logistic News – Cargo Section
We continue to monitor real-time developments across key cargo corridors and global maritime chokepoints.
