The Suez Canal reported its highest-ever annual revenues in 2021 at $6.3 billion, marking a 12.8 per cent increase on 2020, said Chair of the Suez Canal Authority (SCA) Osama Rabie this week.

The number of ships passing through the canal also increased by 10 per cent, marking an all-time high.

The unprecedented figures were achieved despite the only partial recovery of global trade recorded since the early months of 2021. From January to April last year, the canal recorded a 2.8 per cent increase in revenues, or $1.96 billion, up from $1.907 billion during the same months of 2020.

The SCA attributed the improved figures to the development strategy it has adopted for the canal, one of the country’s main sources of foreign currency.

Mohamed Hassan, managing director of Blom Egypt Investments, an asset management company, said the rise in Suez Canal revenues was the result of increased transit tolls in tandem with the rise in petroleum prices in 2021.

The year before, the SCA had reduced transit tolls on the back of the outbreak of the Covid-19 pandemic and the global decrease in petroleum prices to attract vessels and cargo ships instead of their taking the route around the Cape of Good Hope, he said.

Radwa Al-Swaify, head of research at Al Ahly Pharos Securities Brokersage, an investment bank, said the hike in Suez Canal revenues in 2021 was caused by the increase in the number of vessels crossing the canal due to the reduction in transit fees the SCA had announced a year earlier.

The SCA offered a 48 per cent reduction in transit tolls for petroleum tankers carrying cargos of more than 250,000 tons. Roll-on/roll-off ships sailing from ports in northwestern Europe to Santander and then heading directly to Singapore and those heading to the eastern ports of Southeast Asia and the Far East were offered a reduction of eight per cent.

The SCA also announced a 50 per cent decrease in transit tolls for passenger ships.

Some 20,694 vessels crossed the canal in 2021, up from 18,830 in 2020, registering an increase of 10 per cent, while net cargo was increased by 8.5 per cent, Rabie said.

Hassan said that the New Suez Canal had contributed to the increase in the number of ships crossing the canal. The new axis has reduced waiting times for ships from 12 to six hours, leading to an increase in traffic, he said.

He expects canal revenues to continue to rise in 2022 with the increase in transit tolls announced this month.

In November, the SCA said it would increase transit tolls for all ships by six per cent in February 2022, exempting tourist ships and liquefied natural gas (LNG) carriers from the increase. LNG carriers have been granted a transit fee reduction for the first six months of 2022.

The SCA said it is keen to implement a balanced and flexible pricing and marketing strategy that achieves the interests of the authority and its clients and takes into account global economic variables.

It added that it wants to offer exemplary services that allow the canal to remain at the forefront of international trade routes and become the best, fastest, and shortest navigation route available.

Al-Swaify believes that the rise in transit tolls, coupled with the full recovery of global trade, will increase the canal’s revenues by between five and 10 per cent. Rabie foresees a rise of 11.1 per cent in revenues, saying that the canal is expected to collect $7 billion this year.

*A version of this article appears in print in the 10 February, 2022 edition of Al-Ahram Weekly.