The Suez Canal tolls for all ships are expected to increase by 15% the next year, with the exception of dry cargo and cruise ships, which will see a 10% increase. The Suez Canal tolls for all ships are expected to increase by 15% the next year, with the exception of dry cargo and cruise ships, which will see a 10% increase. The Suez Canal tolls for all ships are expected to increase by 15% the next year, with the exception of dry cargo and cruise ships, which will see a 10% increase.
Adm. Ossama Rabiee, Chairman and Managing Director of the Suez Canal Authority, made the announcement about the transit toll increases over the weekend. They will take effect in January 2023.
The SCA claims that a variety of pillars, the most significant of which is average freight prices for different periods of vessels, provide the foundation for the hikes.
“In this regard, there were considerable and consecutive increases within the past period; especially in containerships’ freight rates, compared to those recorded before the Covid-19 pandemic which will be reflected in the high operational profits that will be achieved by navigational lines throughout 2023 in light of the continued impact of the disturbances in global supply chains and the congestion in ports worldwide, as well as the fact that shipping lines have secured long-term shipping contracts at very high rates,” said Adm Rabiee.
The SCA also recognized the much better performance of the tanker industry, noting daily oil tanker charter rates up 88% compared to average rates in 2021 and daily average rates for LNG carriers up 11% compared to the prior year.
All tolls, including those for tankers and containerships, will rise by 15%. The main exceptions are cruise ships, which are still recovering from a nearly complete shutdown during the pandemic, and dry bulk ships, whose charter prices are now very low.
It comes at a time when ship owners are already dealing with rising fuel prices, but the toll increases were partially justified by the greater fuel savings by using the Suez Canal’s shorter route.
The option, which involves sailing around the Cape of Good Hope, offers a substantially quicker route between Asia and Europe than the Suez Canal.
When the containership Ever Given ran aground in March 2021, analysts at Sea Intelligence calculated that transiting through the Cape of Good Hope would add seven days to a voyage from Singapore to Rotterdam, ten days to the West Mediterranean, a little over two weeks to the East Mediterranean, and between 2.5 and 4.5 days to the US East Coast.
Adm. Rabiee also pointed out that given the current global inflation rate of over 8% and rising operational and navigational costs for the Suez Canal, the increases are unavoidable.
“It was emphasized as well that the SCA adopts a number of mechanisms with the sole aim of having its pricing policies cope with the changes in the maritime transport market and to ensure that the Canal remains the most efficient and least costly route compared to alternative routes,” the Authority said.
If the market results in the canal being less competitive, these take the form of rebates of up to 75% for specified shipping sectors for set periods.
