Egypt announced on Saturday the successful trial run of a new 10-kilometer channel at the southern end of the Suez Canal, a significant step in enhancing the capacity and efficiency of this critical waterway. The Suez Canal Authority (SCA) confirmed that two ships passed without incident through the newly constructed stretch, which is part of a broader effort to modernize the canal following recent disruptions and economic challenges.

The development of the new channel is a key component of Egypt’s accelerated plans to expand the Suez Canal. These plans were fast-tracked after the 2021 grounding of the Ever Given container ship, which blocked the canal for six days and disrupted global trade. The incident highlighted the need for increased capacity and operational resilience, particularly in the canal's southern region, which is a critical chokepoint for maritime traffic. The expansion includes extending the two-way section and widening the existing channel, allowing the canal to handle more ships and reduce the risk of future blockages.

However, while Egypt has made significant progress in its infrastructure improvements, the canal’s revenue has faced a sharp decline due to escalating regional tensions. Since November 2023, Yemen’s Houthi militants have launched attacks on vessels in the Red Sea, citing solidarity with Palestinian militants in Gaza. These attacks have created security concerns for shipping companies and disrupted trade flows through the region, significantly impacting Suez Canal revenue. Egyptian President Abdel Fattah al-Sisi revealed that these “regional challenges” have led to a loss of approximately $7 billion in canal revenue in 2024—a staggering drop of more than 60% compared to 2023.

The new 10-kilometer channel is part of an ongoing effort to mitigate such challenges and ensure the canal’s long-term viability. With the extension, the canal’s two-way section now spans 82 kilometers, up from the previous 72 kilometers, within the total canal length of 193 kilometers. According to the SCA, the expansion will increase the canal’s daily capacity by six to eight ships, while also enhancing its ability to manage potential emergencies, ensuring smoother and safer passage for vessels.

“This expansion underscores Egypt’s commitment to maintaining the Suez Canal as a cornerstone of global trade,” the SCA said in a statement. The authority also noted that it is exploring additional projects to further enhance the canal’s capacity and efficiency, signaling a long-term strategy to secure its role as a critical maritime route.

While the new channel is a positive milestone, the sharp decline in revenue serves as a stark reminder of the broader impact of geopolitical instability on global trade. Egypt’s continued investment in the canal’s development highlights its determination to overcome these challenges and maintain its strategic importance in international commerce.