Large ships can benefit from a temporary 15% discount when passing through the Suez Canal, which connects the Mediterranean with the Red Sea, as Egypt attempts to attract major shipping lines back to this critical maritime route.
Osama Rabie, the head of the Egyptian administrator of the Suez Canal (SCA), announced the reduced rate on Tuesday. It will take effect on Thursday and last for 90 days for ships with a minimum capacity of 130,000 tonnes, whether fully loaded or empty.
By implementing these temporary measures, Egypt hopes to persuade major shipping lines, such as Denmark’s Maersk, to send their vessels through the Suez Canal once more. These companies have been avoiding the Red Sea, which sits on the key trade route between Asia and Europe, because Houthi rebels from Yemen have been attacking ships since the conflict between Israel and the Palestinian group Hamas erupted in the Gaza Strip in October 2023.
Before the conflict, around 12% of global maritime trade passed through the Suez Canal. However, attacks by the Houthis have drastically reduced traffic, with Egyptian President Abdel Fatah al-Sisi stating that his country has lost approximately $7 billion in revenue as a result.
Last week, mediator Oman announced that the United States and the Houthis had agreed to a ceasefire.
Rabie highlighted on Tuesday that there is now “relative stability and calm in the security situation of the region and the Red Sea.” This, combined with the “favourable conditions,” should encourage shipping lines to return to using the Suez Canal for their routes.
