Egypt’s Suez Canal Revenue Sinks in 2024 on Red Sea Turmoil

Revenue from Egypt’s Suez Canal plunged nearly 60 percent in 2024 as attacks on commercial vessels in the Red Sea forced global shippers to abandon the vital waterway and reroute vessels around the Cape of Good Hope, adding weeks to delivery times and millions in extra fuel costs.

The Suez Canal Authority said revenues fell to $3.99 billion in 2024 from a record $10.25 billion the previous year.

The number of ships using the canal dropped to about 13,200 from over 26,000, with global shipping giants diverting traffic amid mounting security concerns.

The sharp drop follows a wave of drone and missile attacks by Yemen’s Houthi rebels, who began targeting merchant vessels in late 2023 in response to Israel’s war in Gaza.

The Houthi campaign disrupted the main artery connecting Asia and Europe, which typically carries around 10 percent of global trade.

To avoid the Red Sea, shipping lines rerouted vessels around Africa, extending journeys by up to 10 days and increasing fuel costs by more than $1 million per trip.

The longer journeys have raised freight rates, delayed delivery of goods and pushed up costs for businesses and consumers globally.

For Egypt, which relies heavily on hard currency from canal fees, the revenue collapse has deepened its economic woes, compounding an already critical shortage of foreign exchange and rising inflation.

In a bid to boost capacity and manage future disruptions, Egypt recently completed a new 10-kilometre channel near the southern section of the canal.

However, officials have warned that alternative trade routes remain unsustainable and that the canal remains irreplaceable in global maritime logistics.

The Red Sea crisis has exposed vulnerabilities in international shipping lanes, raising concerns among insurers, ports and shippers about long-term supply chain security.

Despite diplomatic and military efforts to secure the Red Sea corridor, there is no clear timeline for restoring confidence among global carriers, leaving Egypt’s key waterway under pressure and the world’s shipping industry navigating uncharted waters.

gandae@businessdayafrica.org