Suez Canal Authority Chairman Optimistic About Red Sea Stability, Urges AP Moller-Maersk to Reconsider Routes

In a recent meeting with senior executives from shipping giant AP Moller-Maersk, Suez Canal Authority (SCA) Chairman Osama Rabie expressed optimism about the returning stability in the Red Sea region. According to an SCA statement, Rabie highlighted positive indicators in the area, urging the Danish container shipping group to factor these developments into their future maritime planning.

In recent months, several global shipping companies, including Maersk, have rerouted vessels around the southern tip of Africa, bypassing the Gulf of Aden and the Red Sea to avoid potential attacks from Yemen’s Iran-aligned Houthi rebels.

These reroutes have had significant economic implications for Egypt, with President Abdel Fattah al-Sisi estimating a $7 billion loss in Suez Canal revenues in 2024 alone. The toll on Egypt’s economy underscores the vital role the Suez Canal plays in global trade, and the ripple effects of maritime disruptions in the region.

While the Houthis have announced plans to curb their attacks on commercial vessels, the safety of shipping routes in the region remains a point of contention. Since November 2023, the Houthis have carried out more than 100 attacks on vessels, sinking two ships, seizing another, and resulting in the deaths of at least four seafarers. These incidents have prompted many companies to err on the side of caution, opting for longer and more costly routes to safeguard their crews and cargo.

Despite these challenges, Rabie’s comments suggest a shift in the SCA’s outlook on regional security. The positive signs of stability in the Red Sea are being closely monitored by the Egyptian authorities, with Rabie urging shipping companies to consider returning to traditional routes through the Gulf of Aden and the Red Sea as conditions improve.

For Maersk and other major shipping lines, the decision to resume normal routes will hinge on continued security improvements in the region. While the Houthis’ pledge to reduce attacks is a step in the right direction, the long-term viability of the Red Sea as a secure trade corridor remains uncertain. Maersk’s commitment to rerouting vessels, despite the reduction in attacks, highlights the cautious approach many shipping companies are taking.

Egypt’s Global Trade Infrastructure

Beyond the strategic importance of the Suez Canal, Egypt has been actively expanding its trade and logistics infrastructure . Therefore, it developed an extensive network of integrated trade corridors and logistics hubs.

Among the most significant projects underway are seven comprehensive logistics corridors that are currently being implemented as part of the national transport development plan. These include:

1. The Sokhna-Alexandria Logistics Corridor: This corridor stretches from the Sokhna Port on the Red Sea to the Alexandria Port on the Mediterranean Sea, facilitating efficient transportation of goods between Egypt’s two major ports.
2. The Arish-Taba Corridor: This link connects the Arish Port on the Mediterranean with the Taba Port on the Gulf of Aqaba, strategically enhancing trade between Egypt and neighboring countries.
3. The Cairo-Alexandria Logistics Corridor: Extending from Egypt’s Basyoun railway station to the Alexandria Port, this corridor aims to improve the flow of goods between Egypt’s industrial heartland and the Mediterranean.
4. The Tanta-Damietta Corridor: Linking the Tanta logistics area in the Delta with the Damietta Port via the Tanta-Mansoura-Damietta railway, this corridor boosts access to key industrial and agricultural regions.
5. The Gargoub-Sallum Logistics Corridor: Connecting the Gargoub Port on the Mediterranean with the Sallum Border Port, this corridor improves trade links with neighboring Libya and North African markets.
6. The Cairo-Aswan-Abu Simbel Logistics Corridor: This includes the second phase of Egypt’s electric rail project and the western desert highway, facilitating trade through Upper Egypt and enhancing connections with the country’s southern regions.
7. The Safaga-Qena-Abu Tartour Logistics Corridor: Starting from Safaga Port on the Red Sea, passing through the electric train route, and connecting to the Qena-Abu Tartour railway, this corridor strengthens links with mining areas in Upper Egypt.

These logistics corridors are much more than just physical routes; they represent an integrated system that connects Egypt’s industrial, manufacturing, and mining sectors with its ports. The result is a network that supports the efficient movement of goods, provides flexibility, and enhances Egypt’s position as a trade hub. The strategic advantage of Egypt’s geographic location, with close proximity to global markets, further amplifies its ability to attract foreign investments and stimulate industries like outsourcing and manufacturing.

In particular, the logistics corridors are expected to generate billions of dollars in investments in areas surrounding the corridors and ports, much like the ongoing success of the Suez Canal Economic Zone. By strengthening its infrastructure and creating seamless trade routes, Egypt is positioning itself to benefit from the growth of international trade and the increasing demand for efficient and reliable supply chains.