17 May 2025

Egypt cuts Suez Canal tolls by 15% for large container ships to lure them back, but experts say the decision to return to the Red Sea still hinges on security risk assessments.

Suez Canal

Egypt has announced a 15% discount on Suez Canal transit fees for container ships with capacities of approximately 13,500 TEUs or more over the next three months. The move aims to encourage carriers to return to the vital trade route, as the Red Sea shipping crisis shows signs of easing.

According to the Suez Canal Authority (SCA), the decision was made “at the request of container ship owners and operators” and is based on “recent positive developments regarding security in the Red Sea and Bab al-Mandab Strait.”

Amid escalating security concerns—especially following attacks by Yemen’s Houthi rebels on commercial vessels in support of Hamas during the conflict with Israel—most global container fleets have diverted away from the region. As a result, Suez Canal transit revenues have dropped by more than half over the past year.

Last week, U.S. President Donald Trump declared the 17-month-long Red Sea shipping crisis to be nearing its end. Speaking from the White House, he said the Houthis had agreed to halt attacks on ships, and in return, the U.S. would end its airstrikes on the group. His statement was confirmed by Oman’s foreign minister, who has acted as a mediator. However, Houthi forces have continued to launch missiles toward Israel, prompting retaliatory military responses from Tel Aviv.

Most major container carriers remain cautious. In recent earnings calls, leading companies stated that it is still too early to resume transits through the Red Sea.

Vincent Clerc, CEO of Maersk, stressed last week that returning to the Red Sea based on a vague ceasefire would be “irresponsible,” warning that the region remains too unstable to ensure safety.

Speaking to Splash, Lars Jensen, CEO of Vespucci Maritime, said: “I don’t think a 15% toll discount will materially affect decisions on whether to resume Red Sea transits under current conditions. It’s a risk-based decision.”

Analysts at investment bank Jefferies echoed that view in a note to clients last week: “Given how rapidly the situation is evolving, we don’t expect a major shift back to the Red Sea route, as risks remain significant.”

The report also highlighted that the container shipping sector would be the most impacted if the market adjusts once Red Sea transit resumes.

Jefferies estimates that the recent rerouting of vessels has effectively reduced global container shipping capacity by 11–12%, a key factor distinguishing a “healthy” market from one where carriers have little pricing power.

Source: Splash