The fee hikes could provide relief to the cash strapped government or might drive ship owners elsewhere.
Egypt’s Suez Canal Authority has announced that it will raise canal fees on shipping through the waterway by between 2 and 5 % as from May 1st 2013, Port and Shipping news portal, ports.co.za reported. Container and car carrier ships will pay an extra $2, while bulk carriers, tankers including Liquified Natural Gas carriers will be raised by 5%. This follows a 3% increase implemented in March 2012, the first then for three years.
The Canal Authority says that its decision to raise tolls again was taken after studies into prospects for growth in the world economy and global trade. However, critics believe the increase is more of a relief measure by the cash-strapped government of Egypt. Tourism and revenue from the canal are Egypt’s principal sources of income.
In 2012 it earned nearly $5bn in revenue, according to shipping news provider, Tradewindsnews.
The decision could force ship owners, already battling a deep slump in their sector, to re-route vessels around the Cape of Good Hope, a spokesman for the International Chamber of Shipping (ICS) said.
“This is not the time for the SCA to be announcing increases, which for some trades seem very dramatic indeed, and which many shipowners will find impossible to pass on to their customers,” said Mr Hinchliffe, whose association represents over 80% of the world’s merchant fleet.
“The effect of these increases will be to give a spur to those owners who may already be considering the Cape route as a serious alternative,” said Hinchliffe.
The ICS said the route around Africa via the Cape was becoming relatively less expensive as ships have resorted to slow steaming – a method where ships slow their speed to cut fuel consumption.
At the same time unrest in Egypt is causing unease. “Recent events in Egypt … are generating concerns about the security of the canal itself,” the ICS said. Hinchliffe said the ICS is disappointed that it was not consulted over the planned increases, the Journal of Commerce reported.