The Gate of Grief may be in for more suffering.
Just when the Egyptian government was hoping traffic through the Suez Canal might return to normal after 15 months of conflict, the waterway is imperilled all over again.
Days after the Yemeni Houthis threatened to resume missile attacks on Israeli-bound ships, at the weekend the United States launched bombing raids on their strongholds in Yemen and announced their readiness to keep them up for weeks. “Hell will rain down upon you like nothing you have ever seen before,” US President Donald Trump warned.
And yet in February it looked so good. Admiral Osama Rabie, the canal’s beleaguered administrator, had hailed the passage of convoys via the Red Sea’s Bab-al-Mandab Strait – in Arabic “Gate of Grief” because of its treacherous currents – as a sign of the much-awaited recovery. Led by a Chinese car carrier and an Indian oil tanker, the ships passed through safely two months after the last attack by the Houthis, and Rabie confidently expected normal business to resume by year’s end.
Depending on what the investigation finds, it’s possible foreign-flagged vessels could be barred from US ports.
According to the latest research from shipping consultancy Banchero Costa, about 200 vessels were crossing the Red Sea every week. That’s down from the average of at least 500 a week before the attacks, knocking up to 70 per cent off the canal’s income. Revenues plummeted to US$4 billion during 2024, down by 60 per cent on 2023’s record $9.4 billion.
Partly because of the canal’s loss of trade, the Cairo government had to negotiate a $57 billion bailout from the International Monetary Fund and shore up its war-torn finances. But at least Cairo could expect a recovery from the canal.
Only the tariff war has now thrown maritime supply chains into confusion. In February, the United Nations’ Trade and Development office warned that “new risks loom, including trade imbalances, evolving policies, and geopolitical tensions in 2025”.
US patrols in the Red Sea (Africom Pao/US Africa Command)
US patrols in the Red Sea (Africom Pao/US Africa Command)
Other research paints a picture of mounting uncertainty in global supply chains, with shipping in the middle. An analysis by ContainerXChange, a site that tracks cargo movements, warned the industry about mounting volatility, citing trade dynamics that are changing overnight: “With shifting regulations and unpredictable tariffs, long-term contracts could lock businesses into unfavourable conditions if policies change unexpectedly”.
And the chief executive of Hysun Containers, Amanda Marr, said: “We're already seeing enhanced efforts to reroute cargo through alternative markets like the Middle East, Indian subcontinent, and Southeast Asia.”
Then, adding to the confusion, in mid-March Washington’s Federal Maritime Commission announced an investigation into how conditions and practices in the world’s maritime choke points including the Suez Canal are affecting transit times, but with particular reference to foreign-flagged vessels. Depending on what the investigation finds, it’s possible foreign-flagged vessels could be barred from US ports. Ominously, the commission’s exact words note its intention to take “remedial measures in issuing regulations to address conditions unfavourable to shipping in US foreign trade [that would] include refusing entry to US ports by vessels registered in countries responsible for creating unfavourable conditions.”
It’s worth noting though that the commission’s new chairman, Louis Sola, is his own man. Although a Trump appointee who promises to be deeply involved in future dealings with the Panama Canal, his testimony shows that he supports the canal authority and has not endorsed its reversion to American ownership although being highly critical of China’s involvement there.
And for good measure, Washington’s mooted penalties of up to $1.5 million against Chinese-built ships entering US ports have further destabilised the supply chain as the container giants try and figure out alternative routes. About 40 per cent of their order books for newbuilds are already contracted to China.
During the enforced dearth of traffic, the canal authority used the time to widen and extend the waterway, which would allow for the transit of an extra six to eight ships a day. But if the Houthis carry out their threats against shipping and American fighters continue strafing Yemen, the extensions may turn out to be a waste of time and money.