Egypt’s Suez Canal Considers 12-15% Transit Fee Discounts to Revive Traffic

Strategic Waterway Seeks to Counter Houthi Disruptions

The Suez Canal Authority is planning to offer discounts of 12% to 15% on transit fees in an effort to restore shipping traffic through the vital waterway, according to authority chief Osama Rabie. The move comes as the canal faces severe revenue losses due to ongoing attacks by Yemen’s Houthi rebels on Red Sea shipping.

Imminent Discounts Await Presidential Approval

Rabie revealed in an interview with Sada al-Balad TV that the discounts could be implemented within days, pending ratification by Egyptian President Abdel Fattah al-Sisi. The proposed fee reductions aim to make the canal more attractive to shipping companies that have been diverting routes due to security concerns.

Revenue Plummets Amid Red Sea Security Crisis

Recent central bank figures show the canal’s revenue dropped dramatically to $880.9 million in Q4 2024 from $2.40 billion a year earlier. This critical source of foreign currency for Egypt has been severely impacted by Houthi attacks, which have disrupted one of the world’s busiest shipping lanes.

Shipping Industry Seeks Risk Mitigation

Last week, Rabie met with shipping representatives who requested temporary incentives to offset rising insurance costs for vessels operating in what they now consider a high-risk zone. The discussions followed an Oman-mediated ceasefire between the U.S. and Houthis, though the agreement doesn’t extend to Israeli-bound shipping.

The Houthis claim their attacks target Israel-bound cargo in solidarity with Palestinians in Gaza, but their actions have effectively deterred many vessels from using the Suez Canal route altogether.

Source: Times Live | Credit: Reuters