Suez Canal Authority seeks container lines return

CAIRO : The Suez Canal Authority (SCA) has met with representatives of major shipping lines to try and convince them to return to transiting the key waterway that connects Europe to Asia via the Red Sea.

Admiral Ossama Rabiee, Chairman of the SCA, met with the representatives of 20 shipping lines and shipping agencies to discuss developments in the Red Sea and Bab el-Mandeb region. Major container lines, and many other shipping companies have diverted vessels via the Cape of Good for much of the last two years to avoid attacks in the Red Sea by the Houthi in Yemen. With peace continuing hold between Israel and Hamas in Gaza the Houthi have stopped attacking commercial shipping in the Red Sea region.

The Admiral invited all shipping lines to conduct trial voyages of their container ships through the Suez Canal and commended French line CMA CGM for making two transits of the canal.

Two container ships operated by French carrier CMA CGM recently transited the Suez Canal on their eastbound voyages to Asia, marking what consultant Linerlytica calls the “first tentative steps” in the return of shipping lines to the Red Sea.

CMA CGM’s two vessels were both operating on its FAL1 service, which, like most other lines, have been diverted around the Cape of Good Hope over the last two years, following Houthi attacks on ships linked to, or calling at, Israeli companies or ports.

“Notably CMA CGM has not diverted any North Europe headhaul ships westbound on the Suez [Canal] and is only redeploying ships on selective eastbound backhaul voyages in order to bring the ships and empty containers back to Asia following severe delays at European ports recently,” commented Linerlytica in its weekly market report.

However, while the transits by 18,000 teu vessels are significant, CMA CGM is the only major container line that has continued to make adhoc transits of the Red Sea and Suez Canal over the last two years with the support of the French navy.

The Marseille-headquartered line is looking to further Suez Canal transits. According to the SCA Tariq Zaghloul, CMA CGM Egypt & Sudan Cluster CEO told the meeting with the authorities that he “anticipated an increase in the group’s voyages through the Suez Canal in the coming period”.‏

The authority also reported MSC was looking to return to the canal on the backhaul to Asia. SCA said that Ehab Fathy, Operations Manager of the shipping line MSC in the Suez Canal region of Egypt, “anticipated a swift return of southbound vessels in the coming period, given the improved stability in the region”.

Hapag-Lloyd meantime said it was monitoring developments in the Red Sea, while Maersk affirmed its commitment to investments in Egypt.

According to the SCA October saw the highest number of vessels returning to transit the canal with 229 ships returning to the waterway.

For container shipping any return to the much shorter Suez route would release 130 ships, 5.9% of global capacity, for redeployment, “which would trigger severe disruptions to the freight and charter markets,” according to Linerlytica analysis.

Source : Seatrade Maritime