Revenue from the Suez Canal hits an all time peak of $7 billion this financial year, according to the Canal Authority.
The Suez Canal in Egypt, which was dug in the mid-1800s by a French company using Egyptian labor, connects the Mediterranean Sea to the Red Sea via Lake Said and the Great Bitter Lake with no locks. Since 1956, it has been run by the Suez Canal Authority (SCA), a state-owned concessionaire of Egypt. It can accommodate nearly 100 ships per day, and charges a canal tariff based on their tonnage, length, speed, and what cargo they’re carrying.
The canal cuts thousands of miles off any trip between the Indian Ocean and the Atlantic, which may mean cargo arriving weeks earlier. Revenue from the Suez Canal is on of the main sources of foreign currency flowing into Egypt.
On June 30, Canal Authority Chairman Osama Rabea made a statement that the revenue from the Suez Canal tariffs had hit a record high of $7 billion in the 2021-2022 financial year, up over 20 percent from the year before.
In that time, the number of ships passing through the 120-mile waterway increased over 15 percent, from 19,000 to 22,032. Those ships brought larger cargoes, too, a cumulative 1.32 million tonnes, or 1.46 US tons.
The canal is currently undergoing an expansion, after the highly publicized and disruptive grounding of the cargo ship Ever Given in 2021 that blocked all trade through the canal for six days. Most of the additional revenue will be folded into that project, which intends to widen and deepen the narrowest sections of the canal, so that convoys of ships can pass in both directions with less risk of another cork-in-a-bottle situation.
Tariffs in the canal continue to increase, which has an impact on global trade and prices of goods and products which have to travel that way. While cargo does take alternate routes, the expedience of the canal still usually makes those high tariffs the cheaper option.
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