Home Local News Despite the blockage crisis, the Suez Canal reaches record revenues

Despite the blockage crisis, the Suez Canal reaches record revenues

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CAIRO – The Suez Canal recorded the highest monthly income in its history in April, over half a billion dollars. despite blocking navigation at the end of March caused by a giant ship flying the flag of Panama.

Suez Canal Shipping was blocked in late March, when the freighter Ever Given ran aground in a narrow aisle of the international canal. It took six days rescue teams release the ship, after which navigation along the canal resumed.

In a report on the state of Egypt’s economy presented at a cabinet meeting on June 3, Minister of Planning and Economic Development Hala al-Said said The Suez Canal achieved an unprecedented record, recording its highest monthly revenue in April at $ 553.6 million, up from $ 476 million in April 2020. That’s a 16% increase despite the impact of the coronavirus outbreak and the ship lockdown crisis at the end of the March. She said this increase was due to the introduction several alternatives to serve international shipping organizations, ship owners and operators with flexible prices for transit fees per channel.

The income was USD 439.4 million USA in March.

The Suez Canal is a 193 km (120 mi) waterway that connects the Mediterranean to the Red Sea. It is the fastest and safest sea route in the global trade movement between East and West and one of the main sources of Egypt’s national income.

Lieutenant General Osama Rabi, head of the Suez Canal Authority, said in a statement. press statement On May 24, the channel’s April earnings were not cut by the Ever Given crisis.

Wael Kaddour, a former member of the canal’s board of directors, told Al-Monitor by phone that the vessel was stranded and disrupted navigation for six days, leaving more than 400 vessels waiting to cross the waterway. … He said that once the ship was launched, other ships crossed the canal and the fees they paid helped boost revenues to an unprecedented amount.

Kaddour, however, expressed dissatisfaction with how the channel’s leadership negotiations with compensation ever given; Egypt demanded more than $ 900 million before the amount was reduced. He said this poor management will have negative consequences for the channel in the future and should be corrected.

The canal authorities are in talks with the owner of Ever Given, demanding financial compensation for the costs and losses incurred by the canal after the vessel blocked the waterway. May 30, Commercial Court of Ismailia postponed exam cases until June 20 to make room for further negotiations amid a dispute over the amount of the payment. Channel authorities have reduced the requested compensation from $ 916 million to $ 550 million; the ship owner offered to pay $ 150 million.

Kaddour said the Suez Canal is entitled to compensation for damage caused by the ship’s grounded, but without exaggerating the losses.

He expected the channel’s annual revenue to reach $ 5.8 billion in fiscal 2020-21, ending in June.

Ahmed el-Shami, adviser to the Ministry of Maritime Transport, said that although the global economy decrease to 4.4% and a 10% drop in global trade in 2020 due to the coronavirus pandemic, the Suez Canal is still hitting record highs and high revenues. According to him, this is a very important and positive thing for the country’s economy.

Shami told Al-Monitor by phone that the channel authorities’ achievement of record revenue in April indicates that the Suez Canal remains the safest, fastest and most attractive sea passage in the world and a major hub for global trade. He expected revenue for the current fiscal year to reach $ 6.2 billion, slightly more than Kaddour had expected.

Shami said the increase in Suez Canal revenues is not a coincidence, but rather the result of a lot of efforts by the Egyptian state and the canal authorities, which have developed good marketing policies and provided incentives and reduced ship fares. This contributed to an increase in the number of ships passing through the canal, which was reflected in an increase in revenue. For example, 1,814 ships passed through the canal in April, up from 1,731 ships in the same month in 2020.

He said improvements are being made to the canal on a regular basis, and the latest plan is to widen and deepen the southern part of the canal where the blockage occurred. He said Egypt has huge locomotives and dredgers to prepare for any future crisis that hits the canal. He added that the ports surrounding the canal are also constantly evolving to remain attractive for investment.

Rashad Abdo, director of the Egyptian Center for Economic and Strategic Research, said he did not believe the Ever Given crisis had any impact on the channel’s revenues. He told Al-Monitor that the April earnings data is a positive harbinger for the national economy.

Abdo added that global coronavirus vaccination campaigns have helped replenish the global trade movement and boost oil prices. As a result, the revenues of the Suez Canal increased, as did the number of ships passing through it, he said.

Abdo called for the development of flexible marketing policies and scrutiny of the global market to support the growth of Suez Canal revenues.

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of Algulf.net and Algulf.net does not assume any responsibility or liability for the same.

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