The Suez Canal is expecting the fleet of vessels of the French shipping company "CMA CGM" (CMA CGM), which gives hope for the restoration of traffic on the international trade artery after the conclusion of a ceasefire in the Gaza Strip. This was reported by the Internet portal "Enterprise News", referring to the canal management, BTA reports.
Some of the carriers may return to the Red Sea in the next two to three weeks, the chairman of the Red Sea Shipping Chamber, Abdel Kader Gabala, told the specialized publication. Among them is "Dubai Ports World" (DP World), whose deputy chief executive Yuvraj Narayan told Reuters that ships without an Israeli connection could start passing through the Red Sea again in the next two weeks.
The news follows a statement by Yemeni Houthi rebels that after a ceasefire they would only attack vessels linked to Israel.
Traffic disruptions in the area have cost Egypt's treasury about $7 billion in lost Suez Canal revenue in 2024, a drop of nearly 60 percent year-on-year.
The return of shipping should reduce the cost of transiting the canal. Gabala expects lower insurance and escort fees. Shipping costs could fall by 20 to 25 percent, Narayan said.
Companies should be keen to return, given that the alternative route around the Cape of Good Hope in South Africa has proven too expensive. Ships use 30 percent more fuel and the voyage is extended to 80 days, said Ahmed Mustafa, vice president of the International Federation of Freight Forwarders in Egypt.
However, industry representatives remain cautious, saying it is too early to assess the situation. In addition, new factors are emerging, such as US President Donald Trump’s threats to take back the Panama Canal, which could shake up the industry in unpredictable ways.
Convincing shipping lines to use the Suez Canal will take time and require "aggressive marketing, incentives and a strong focus on ensuring safe transit," Mustafa said. He said action must be taken quickly, as leading shipping companies are already investing in bunkering infrastructure in South Africa and Egypt must match its own investments in bunkering stations and logistics services.
The country also needs to take advantage of changes in global supply chains, Mustafa said. Companies are moving production out of China, and this is an opportunity for Egypt to "use its geographical advantage" and establish itself as an "indispensable logistics hub".
When traffic returns to the Red Sea, the Suez Canal will be ready to handle more ships with a new 10-kilometer section near the Small Bitter Lake, which is set to be put into operation in the first quarter of 2025 after successful tests last week. The expansion increases the total length of the canal's two-way section from 72 to 82 kilometers. The Suez Canal, which normally carries about 12 percent of global trade, is a key source of foreign exchange for Egypt, along with tourism.
The waterway connects the Red Sea with the Mediterranean, creating the shortest route for transporting goods by water between Europe and Asia.