Suez Canal Authority Monitors Red Sea Amidst Rising Concerns For The Global Shipping Sector

The Suez Canal Authority (SCA) is keeping an eye on the rising Red Sea tensions as a result of recent militant attacks on nearby vessels by Yemenis. The Suez Canal is a vital economic route that connects Europe and Asia. Still, since November 19, 55 vessels have opted to take another route through the Cape of Good Hope, according to SCA Chairman Osama Rabie’s statement on Sunday.

Major shipping lines such as A.P. Moller-Maersk, Hapag-Lloyd, MSC Mediterranean Shipping Co., and CMA CGM have temporarily suspended voyages through the Red Sea due to the heightened risk of attacks by Houthi militants off Yemen’s coast, even though this diversion represents a small fraction of the 2,128 vessels that passed through the canal during the same period.

Concerns regarding the possible effects of the situation on the global shipping sector have been raised. In the Red Sea, the U.S. military reported shooting 14 drones that were being launched from Houthi-controlled regions of Yemen. The choice to avoid the Red Sea route will result in seven to ten more days of travel, as per the freight forwarding platform Flexport Inc., situated in San Francisco.

Egypt relies heavily on foreign exchange from the Suez Canal, boosting its economy. Canal transit fees increased from $7 billion to $9.4 billion in the fiscal year 2022–2023. Given the canal’s economic significance, Egypt is deeply concerned about the current circumstances, mainly because of the country’s most profound economic crisis in decades.

Reference: BNN Bloomberg

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