Admiral Ossama Rabiee, Chairman of the Suez Canal Authority (SCA), met with shipping representatives on Sunday to discuss the impact of current conditions in the Red Sea and Bab al-Mandab region on the maritime transport market, the Egyptian Cabinet announced.
Admiral Rabiee emphasised the Suez Canal’s crucial role in global trade, with 12 per cent of global trade and 25 per cent of container trade passing through it, noting that current conditions pose challenges to global supply chains due to longer journey times and increased shipping costs.
Rising shipping and insurance costs directly affect global supply chains, leading to higher commodity prices, delivery delays, and increased environmental harm due to greater fuel consumption and carbon emissions from ships taking alternative routes.
The meeting highlighted the challenges faced by Egyptian exports and imports due to increased global shipping traffic, suggesting that the Authority consider offering more benefits to cruise and cargo ships on certain routes.
They also mentioned that some shipping lines seek incentives and discounts due to high insurance costs in the Red Sea and Bab al-Mandab regions, proposing linking these reductions to the size of the loads crossing the canal.
Some argue that asking the Suez Canal Authority for discounts isn’t the best solution, given the current crisis is due to security issue. They believe the authority shouldn’t alter its pricing policies due to the crisis but could consider discounts for ships with high insurance costs after a thorough examination. Therefore, discounts aren’t the ideal solution, instead, they suggested considering privileges for ships travelling between Mediterranean and Red Sea ports.
Admiral Ossama Rabiee confirmed that he has plans for regular meetings with representatives of shipping lines and agencies to address the ongoing Red Sea tensions.
