Trendwatch: Drop in Suez Canal revenues could affect Egyptian economy; FMC announces hearing on shipping conditions in the Red Sea; US targets Houthi anti-ship missiles in new strike on Yemen, officials say

Drop in Suez Canal revenues could affect Egyptian economy

Chairman and managing director of the Suez Canal Authority (SCA), Admiral Osama Mounier Mohamed Rabie said that dollar revenues from the canal are down 40% from the beginning of the year compared to 2023, while vessel traffic has declined by 30% in the same period.

The number of ships that have passed through the Suez Canal dropped to 544 so far this year, from 777 in the equivalent period of 2023, according to Rabie.

FMC announces hearing on shipping conditions in the Red Sea

The Federal Maritime Commission will hold an informal public hearing on February 7, 2024, to examine how conditions in the Red Sea and Gulf of Aden regions are impacting commercial shipping and global supply chains.

The hearing will allow stakeholders in the supply chain to communicate with the Commission how operations have been disrupted by attacks on commercial shipping emanating from Yemen, steps taken in response to these events, and the resulting effects.  In addition, the hearing will allow the Commission to gather information and identify any new issues related to these disruptions subject to Commission statutes, such as implementing contingency fees and surcharges.

US targets Houthi anti-ship missiles in new strike on Yemen, officials say

WASHINGTON, Jan 16 (Reuters) - The U.S. military on Tuesday carried out a new strike in Yemen against four Houthi anti-ship ballistic missiles, two U.S. officials told Reuters, the latest move against the Iran-aligned group over its targeting of Red Sea shipping.

One of the officials said the missiles were struck because they were being prepared to target ships in the region. The U.S. strike came a day after Houthi forces hit the U.S.-owned and operated dry bulk ship Gibraltar Eagle with an anti-ship ballistic missile.

Houthi attacks on Red Sea shipping have continued even after the U.S. and Britain last week launched an initial wave of strikes to degrade Houthi capabilities.

California’s long-embattled ports are winning back imports

U.S. importers are rediscovering the lure of Southern California ports.

Trade is swinging back to the ports of Los Angeles and Long Beach after a period in which pandemic-driven shipping disruptions and broader shifts in manufacturing pushed supply chains more heavily toward Gulf Coast and East Coast ports. 

The Southern California ports in September, October and November recorded year-over-year increases in containerized imports of between 17% and 31%, according to ports data. At the same time imports fell at East Coast gateways such as Georgia’s Port of Savannah and the Port of New York and New Jersey.

Add soaring insurance bills to mounting Red Sea trade chaos

The cost of war-risk insurance for vessels sailing through the Red Sea is spiraling, adding a further potential impediment to trade passing through a waterway already labeled too dangerous for merchant shipping by the US Navy.

Underwriters are now charging between 0.75% and 1% of the value of the ship to sail through the region, according to people familiar with the matter, jumping significantly since US and UK airstrikes targeted the Houthi rebels in Yemen at the end of last week. Just a few weeks ago, quotes for cover were about one tenth of that amount. The sharp increase runs the risk of making it too expensive to traverse the vital waterway.

Today in Energy: Solar and wind lead growth of U.S. power generation for the next two years

In our latest Short-Term Energy Outlook, we forecast that wind and solar energy will lead to growth in U.S. power generation for the next two years. As a result of new solar projects coming online this year, we forecast that U.S. solar power generation will grow 75% from 163 billion kilowatt-hours (kWh) in 2023 to 286 billion kWh in 2025. We expect that wind power generation will grow 11% from 430 billion kWh in 2023 to 476 billion kWh in 2025.

In 2023, the U.S. electric power sector produced 4,017 billion kilowatt-hours (kWh) of electric power. Renewable sources—wind, solar, hydro, biomass, and geothermal—accounted for 22% of generation, or 874 billion kWh, last year. Annual renewable power generation surpassed nuclear generation for the first time in 2021 and coal generation for the first time in 2022.