The Suez Canal Authority (SCA) has announced a temporary 15% cut to the transit fees charged on large boxships to encourage them to start using the waterway again following a US-Houthi ceasefire in the Red Sea.
The measure applies for 90 days from 15 May to boxships with a Suez Canal Net Tonnage of 130,000 or above, according to an SCA circular published on Tuesday.
“This comes in response to the requirements of many customers, including owners and operators of container ships,” SCA chairman Admiral Osama Rabie said.
In a meeting with representatives of 25 major liners and shipping agencies last week, Rabie received rebate requests to help offset the high insurance costs they are facing.
Shipping representatives widely reiterated their reluctance to return to the waterway in the face of the Houthi threat, which they still perceived as a live one, despite the ceasefire declared this month.
Transits through the Red Sea and the Suez Canal remain stubbornly low, even though the Yemeni rebel group has carried out no confirmed attacks on commercial vessels since November 2024.
In a report issued on 9 May, Clarksons saw no sign of vessels returning.
Suez Canal transits remained 69% below 2023 levels, with Gulf of Aden arrivals down 70%.
Container ships were the most affected: the number of Gulf of Aden arrivals was down 90% from 2023 levels.
Shipowners’ reluctance to return to the region hits SCA coffers hard.
The Egyptian state-owned authority lost nearly $7bn in revenue last year as vessels rerouted around the Cape of Good Hope to avoid Houthi attacks.
According to Clarksons, container ship arrivals in the Cape of Good Hope were more than four times higher in May this year than their monthly 2023 average, before the Houthi crisis.
Such rerouting is good for shipping companies’ bottom line. According to Clarksons researchers, Red Sea disruption adds 11% to global demand for container ships, compared with an increase of about 3% for total shipping.
In the meeting with Rabie on 9 May, Maersk Group representative Hany El-Nady said the recent improvement of the security situation in the region requires “ongoing monitoring … to ensure continued stability” before his company could “evaluate navigation schedules and reconsider policies related to the return of navigation in the Red Sea”.
CMA CGM, which said it already sends 24% of its ships through the Red Sea and the Suez Canal under the protection of European Union warships, expressed the hope that recent developments can result in an increase in traffic.
Between November 2023 and November 2024, the Houthis attacked more than 120 commercial ships via drones, missiles, attempted boardings and one hijacking.
Their attacks caused the death of four seafarers and 10 Houthi fighters, the sinking of two ships and serious damage to four others, as well as the abduction of 25 crew members on the 5,100-ceu Galaxy Leader (built 2002).
Despite their ceasefire with the US, the Houthis said they would continue to target Israeli ships.
The militants have also kept up missile attacks on Israel itself, to try to force the Israeli government to stop its military campaign and blockade of Gaza.
