•  Egypt will offer a 15% discount on Suez Canal transit fees for large container ships starting May 15, 2025, for 90 days.
• The move follows a ceasefire agreement involving the U.S. and Houthi rebels and aims to reverse a steep drop in traffic.
• Egypt has lost $800 million per month in canal revenue; the government is pushing to restore traffic and hit $13 billion in earnings by 2025.

The Suez Canal Authority (SCA) will offer a 15% discount on transit fees for container ships with a net tonnage of 130,000 metric tons or more, starting tomorrow, May 15,. The incentive will run for 90 days and is part of Egypt’s effort to bring back maritime traffic to one of the world’s busiest trade routes.

This measure follows the recent announcement of a ceasefire between the United States and Yemen’s Houthi rebels, who have claimed responsibility for several attacks on commercial ships in the Red Sea since November 2023, citing support for Palestine. The truce is expected to ease tensions and gradually restore shipping traffic through the canal, which fell by half in 2024. Only 13,200 ships passed through the Suez Canal this year, compared to more than 26,000 in 2023.

According to President Abdel Fattah al-Sissi, the drop in traffic has cost Egypt about $800 million in monthly losses. In the 2023–2024 fiscal year, which ends July 1, the canal generated $7.2 billion in revenue. The Egyptian government had set a target of $13 billion in earnings by 2025, a goal now out of reach unless traffic rebounds sharply.

Analysts believe that restoring flows through the Suez Canal could also help stabilize global shipping costs and improve profit margins for cargo companies. This, in turn, could ease inflation on imported goods, since detours around southern Africa, used to avoid the Red Sea, have added up to 12 extra days to many routes, delaying deliveries and pushing up freight rates. A July 2024 study by UNCTAD found that rates had more than doubled on certain routes due to these diversions.

Still, experts say that for canal traffic to return fully, insurance premiums must fall. The Red Sea and Suez Canal corridor remains on the high-risk list for many insurers. In September 2024, Reuters reported that security risk premiums for ships sailing through the region had risen to 2% of vessel value, up from 0.7% earlier that month.