Ships are coming back to the Suez Canal. The recovery is real but not complete

Few economic indicators are as literal as the Suez Canal. You can count the ships.

After a period in which vessels rerouted around the Cape of Good Hope, traffic has been returning. Canal revenues for FY 2025/2026 have been reported at about $4.67 billion, a rise of roughly 23 percent year on year, with vessel numbers up around 10 percent and tonnage up about 22 percent.

Tonnage rising faster than vessel count is the detail worth pausing on: it means the ships coming back are bigger, and bigger ships pay more.

Why the canal is a national-accounts item

For most countries a waterway is infrastructure. For Egypt the Suez Canal Authority is one of a small number of foreign-currency earners, alongside tourism, remittances and exports. Canal receipts arrive in dollars and land directly in the external accounts.

That is why a disruption thousands of kilometres away registers in Cairo as a fiscal event rather than a logistics one, and why the IMF's outlook for Egypt explicitly references a gradual recovery in canal receipts as a component of growth.

What actually moved

Routing around southern Africa adds roughly ten to fourteen days to an Asia–Europe voyage, with the fuel and charter costs that implies. Carriers absorb that when the alternative carries risk they cannot price; they return when the risk premium falls below the cost of the detour.

So the recovery has three legs, and all three have to hold:

• Security assessment. Underwriters and carriers, not governments, decide when a route is usable.
• Insurance pricing. War-risk premiums for Red Sea transits are the mechanism through which risk becomes cost.
• Schedule integrity. Liner networks are built months ahead; carriers will not re-cut a rotation for a fortnight of calm.

Why it is not yet complete

A 23 percent revenue rise is measured against a depressed base. Recovery towards a prior peak is a different achievement from growth beyond it, and conflating the two is the most common error in reading a rebound.

The structural questions also remain open. Some shippers have rebuilt inventory strategies around longer, more predictable transit times. Others have moved volume to rail and air for time-critical goods. Neither adjustment reverses automatically when a route reopens.

What to watch instead of the headline

Monthly transit counts and net tonnage published by the canal authority are more informative than quarterly revenue, because revenue mixes volume with tariff changes and vessel mix. For the wider picture, the World Bank's Egypt country data places canal receipts alongside the other external flows they have to be read against.

The honest summary: the ships are returning, the money is following, and the trend is genuinely positive. It is also contingent on conditions Egypt does not control — which is the permanent condition of owning the world's most important shortcut.

What a transit actually costs

Canal tolls are calculated on a vessel’s net tonnage, its type and whether it is laden or in ballast, which is why tonnage is a better indicator of revenue than a simple ship count.

For a large container ship the toll runs to several hundred thousand dollars. That figure sounds prohibitive until it is set against the alternative: roughly ten to fourteen additional days around the Cape of Good Hope, consuming fuel, crew time and charter days, and pushing a vessel out of a schedule its whole liner network is built around.

The canal is priced against that arithmetic. It captures a share of the saving it creates, which is why the toll can rise without traffic collapsing, and why it cannot rise indefinitely.

The competition that is not a canal

The Suez route’s real competitors are not other waterways. They are three quieter alternatives, each of which takes a slice rather than the whole.

• The Cape route. Always available, never blocked, and slower. It is the fallback that sets the ceiling on what the canal can charge.
• Rail across Eurasia. Faster than sea, dearer, and constrained by geopolitics and capacity. It takes high-value, time-sensitive cargo rather than volume.
• Nearshoring. The structural threat. Cargo that is no longer made in Asia for European consumers does not need any long route at all.

The third is slow-moving and the most consequential over a decade, and it is the one no canal authority can price against.

What Egypt controls

Very little of the canal’s traffic is within Egyptian control, which makes the parts that are unusually important: transit reliability, pilotage quality, tariff predictability and the speed of incident response.

Shipping lines plan rotations months ahead and price uncertainty into every decision. A route that behaves predictably is worth paying for. That is the durable competitive position available here, and it is built through operational consistency rather than announcement.

There is a second-order effect worth naming. A canal that behaves predictably attracts not only transits but the logistics activity that clusters around a reliable route — bunkering, ship repair, transhipment and the industrial zones that depend on them. That activity is stickier than a transit fee, because it involves fixed investment rather than a routing decision taken voyage by voyage, and it is the part of canal economics that compounds.

Frequently asked questions

How much revenue does the Suez Canal earn Egypt?

Canal revenues for FY 2025/2026 have been reported at about $4.67 billion — a rise of roughly 23 per cent year on year, with vessel numbers up around 10 per cent and tonnage up about 22 per cent.

Why did ships stop using the Suez Canal?

Vessels rerouted around the Cape of Good Hope. That adds roughly ten to fourteen days to an Asia–Europe voyage, and carriers accept the cost when the alternative carries a risk they cannot price.

Has Suez Canal traffic fully recovered?

Not yet. A 23 per cent rise is measured against a depressed base, and recovering towards a prior peak is a different achievement from growing beyond it. Some shippers have also rebuilt inventory strategies around longer transit times.

What does it cost a ship to transit the canal?

Tolls are calculated on a vessel’s net tonnage, its type, and whether it is laden or in ballast — which is why tonnage predicts revenue better than a ship count. For a large container ship the toll runs to several hundred thousand dollars, set against ten to fourteen extra days around the Cape.

What can Egypt actually control?

Very little of the traffic itself, which makes the controllable parts unusually important: transit reliability, pilotage quality, tariff predictability and the speed of incident response.