Letter from Mideast: Suez Canal traffic falters amid Red Sea crisis

by Xinhua writer Yao Bing

CAIRO, Nov. 29 (Xinhua) -- In May 2022, nearly two months into my job as a Xinhua correspondent in Egypt, I traveled to Ismailia to cover a job fair at Suez Canal University. It was during my visit that I saw the Suez Canal for the first time.

I learned about this vital waterway, which links the Red Sea to the Mediterranean, through various channels. In China, school textbooks emphasize its strategic importance. Once I knew I would be working in Egypt, studying the canal became an essential part of my preparation.

Standing on its banks was an exhilarating experience. The sight of dozens of massive ships, like moving skyscrapers, gliding back and forth along the 193-km-long, 205-meter-wide waterway that handles about 12 percent of global trade, was awe-inspiring.

At the Aldunfah Beach Club, tourists and locals lined up along the white handrails, capturing photos of the passing ships. Like the Pyramids and Egypt's ancient temples, this man-made marvel has long been a must-see for visitors. Nearby, a huge blue poster boldly proclaimed: "Welcome to the Suez Canal: Egypt's lifeline of peace, prosperity, and development."

The statement rings true. Opened on Nov. 17, 1869, after a decade of construction, the canal symbolizes Egypt's pride, independence, and economic vitality.

The Suez Canal was originally constructed under a concession dominated by French and British interests. In 1956, then President Gamal Abdel Nasser nationalized the Suez Canal Company, asserting Egypt's sovereignty over its own resources and strategic infrastructure. This historic decision dealt a blow to colonial powers and sent a resounding message of self-determination, inspiring post-colonial movements across the developing world.

Today, the canal remains a strategic waterway, and a cornerstone of Egypt's economy, which is grappling with persistent economic woes.

In 2022, the Suez Canal generated a record-breaking revenue of 8 billion U.S. dollars, up from 6.3 billion dollars in 2021, despite the lingering impacts of COVID-19. This significant increase underscores its essential role as a global trade artery, facilitating the passage of over 23,800 ships that year.

In the 2022-2023 fiscal year, the Suez Canal generated approximately 9.4 billion dollars in revenue, marking a significant 35-percent increase from the previous year.

Everything was progressing well until the Houthi group intensified its attacks on passing cargo ships in the Red Sea in November 2023 after the eruption of the Israeli-Palestinian conflict.

In order to show support for Hamas in Gaza and Hezbollah in Lebanon, the Houthi group, which controls large swathes of Yemen, has been using sophisticated weapons, such as ballistic missiles and drones, in attacks on Israeli-linked vessels in the Red Sea.

The attacks have disrupted merchant shipping, forcing vessels to alter routes, which has significantly impacted revenue from the Suez Canal.

Abdul-Malik al-Houthi, the group's leader, said recently that the Houthi group will continue its military operations in the Red Sea regardless of potential policy changes following the U.S. presidential election, calling for the United States and its allies to "end the aggression and siege on Gaza."

Osama Rabie, chairman of the Suez Canal Authority (SCA), said in early October that "the current situation and unprecedented challenges in the Red Sea region" forced shippers to seek alternative navigational routes away from the Suez Canal.

According to a statement released by the SCA on Oct. 6, revenues of the canal dropped by 60 percent and the number of ships passing through the waterway decreased by 49 percent since the beginning of 2024.

When I visited Ismailia in May 2024, in stark contrast to two years ago, only a few vessels were scattered across the vast water.

"The Red Sea crisis has had a significant impact on Suez Canal's shipping industry, resulting in a sharp decrease in the number of passing ships," said an employee of the Aldunfah Beach Club.

Industry insiders were among the first to feel the impact of the worsening situation. Khaled Tony, a 48-year-old businessman from Giza who imports heavy printing machines from Asia, told me in July how the Red Sea crisis had affected his operations.

"I signed contracts with many factories last year, but I couldn't deliver their orders in due time and had to pay penalties for not fulfilling the contracts," he said.

To win back the shippers, Egypt offered temporary discounts on transit fees and bolstered security in the canal and its surrounding waters. However, these measures have had limited effect.

"The lights of passing ships used to adorn the Gulf of Suez at night. But now, it is dark," a resident from the Ain Sokhna port, a key transportation hub near the city of Suez, told me in October.

From the balcony of her apartment overlooking the Suez Canal, Samar Hamed, a 60-year-old resident of Ismailia, took pleasure in a cherished pastime: counting the passing ships.

"I've memorized the names and colors of the big vessels, and I can even tell their names to my grandchild just by recognizing their flags," she said. The recent decline in canal traffic, she admitted, has made her feel sad.

"The Suez Canal means life and revenues for people in the canal cities, and many families are working there," she said. ■