By: AGBI

The Suez Canal Authority expects more global shipping lines to return to the waterway following the signing of a Gaza peace pact.

The summit held in Sharm El Sheikh last month “succeeded in promoting peace in the Red Sea and Bab El Mandab region and paving the way for restoring traffic in the region to normal”, chairman Ossama Rabiee said in a statement.

Houthi militants had been targeting commercial ships since late 2023 in response to the war in Gaza, forcing vessels to avoid the Red Sea and sail around Africa’s Cape of Good Hope. The route can add 10 to 14 days to journeys, inflating costs for fuel, insurance and crew safety.

Rabiee said navigation statistics for October and November showed clear signs of recovery, with further improvement expected.

The Suez Canal Authority earned $373 million in October, compared to $322 million a year earlier. It expects revenue to reach $383 million in November, up from $301 million during the corresponding month in 2024.

Rabiee said the organisation would hold intensive talks with global shipping lines to co-ordinate sailing schedules and the timing of transit resumptions through the Red Sea and the Bab El Mandab Strait.

The canal authority has introduced flexible pricing and incentives, including a 15 percent reduction in tolls for container ships weighing more than 130,000 tonnes.

It expects revenue for 2025 to exceed $4 billion, slightly higher than 2024, and hopes to reach pre-crisis income of $10 billion as early as next year, Rabiee told Ashraq Business, an Arabic financial website.

The chairman said discussions with French shipping agency CMA CGM resulted in an agreement to resume transits through the canal and the strait in December.

The authority also signed an agreement with AP Moller-Maersk on Tuesday to restart the group’s vessel transits from December next year as a step towards restoring full capacity.

“The group places great hope in the peace agreement signed in Sharm El Sheikh and the subsequent global momentum toward de-escalation,” Maersk CEO Vincent Clerc said.

He said security challenges in the Red Sea over the past two years had led to increased shipping costs and freight rates, but the Suez Canal remains the most suitable and efficient route for east-west trade.

The Red Sea corridor accounts for about 12 to 15 percent of global trade and nearly 30 percent of container traffic.