SCA Chief, representatives of shipping lines and agencies discuss repercussions of Red Sea situation on maritime trade movement

CAIRO – 28 January 2024: Chairman of the Suez Canal Authority (SCA) Admiral Osama Rabie met on Sunday with a group of representatives of shipping lines and agencies, to discuss the repercussions of the current conditions in the Red Sea and Bab al-Mandab region the maritime transport market.

The meeting was held at the SCA headquarters in the Guidance Building in Ismailia Governorate, said the SCA Spokesman George Safwat in a statement.

Rabie stressed that the meeting was held to open direct channels of communication with all its clients to consult on the current situation in the Red Sea and Bab al-Mandab region, and to discuss the proposed recommendations to enhance cooperation with the Suez Canal.

He assured that the Authority is working to reduce the impact of the current conditions on the global trade movement passing through the canal by providing a package of navigational and maritime services that suit the needs of passing ships in normal and emergency circumstances.

The services include refueling and marine ambulance services as well as marine rescue, pollution control, ship repair and maintenance services at the Authority’s shipyards.

“The Suez Canal is an integral part of the global trade movement, as 12% of the global trade volume and 25% of the global container trade pass through it,” said Admiral Rabie.

He noted that the current conditions impose more challenges on global supply chains in light of the increased journey times.

he Suez Canal Authority announced Sunday the completion of the reparation of the dry bulk carrier ZOGRAFIA over four days and that it had resumed its journey within the north-bound caravan.

The works included the replacement of some iron parts of the vessel's body, and restoration of main balance pipes as well as hydraulic strut pipes. The ship was targeted by Houthis at Bab Al Mandab Strait while heading from Vietnam to Israel on January 16, as reported by Reuters. It was empty of cargo and had 24 crew on board.

Red Sea tensions and disruptions caused by Yemen’s Houthi attacks, which have led shipping companies to divert cargo from Egypt’s Suez Canal, cost the country around $150 million in canal revenues, according to Bloomberg’s Chief Emerging Markets Economist Ziad Daoud.

However, the economist emphasized that the $150 million loss is negligible when compared to Egypt’s annual $400 billion revenue and the Suez Canal’s reported revenues of $8.8 billion for FY2022/2023.

Posting on his personal X account, Daoud shared a data set released by PortWatch, the International Monetary Fund’s (IMF) platform monitoring disruptions in maritime trade flows, which indicated a steep fall in the canal’s 7-day moving average for December. He added that trade volume through the Suez Canal fell close to 44 percent year-on-year.

Traffic through the Suez Canal has dropped by 30 percent since the start of 2024, Suez Canal Authority (SCA) Chairman Osama Rabie previously revealed, leading to a 40 percent decline in FX revenues between January 1-11.

Shipping companies continue to select alternative routes to their destinations as Houthi attacks target Israel-linked vessels near the strategic Bab Al-Mandeb Strait in the Red Sea. In response, the US, the UK, and Australia, in cooperation with Bahrain, have hit several sites in Yemen.