Egypt’s Suez Canal to increase transit fees by 15% in 2023

Egypt introduced on Saturday that it’ll elevate transit fees in 2023 for all sorts of vessels passing via the Suez Canal.

According to a press release launched by the Suez Canal Authority, transit fees for tankers passing via the canal will rise by 15%. The increase for dry bulk carriers and vacationer ships is 10%. The charge hikes will take impact on Jan. 1, 2023.

“The increase is inevitable and a necessity in light of the current global inflation rates,” the authority’s chief, Osama Rabiee, mentioned in the assertion.

He added that the choice factored in the affect of elevated power costs.

A ship in the Suez Canal in Ismailia, Egypt, on May 17, 2022. An analyst advised CNBC that whereas the rise in Suez dues is not going to have a large affect on commerce flows, it’ll gasoline ongoing inflation.

Sui Xiankai | Xinhua News Agency | Getty Images

Fees might gasoline inflation

An analyst advised CNBC that whereas the rise in Suez dues will not have a “massive impact” on commerce flows, it’ll gasoline ongoing inflation. 

“Oil prices are currently dropping and so if the canal prices itself out against the competition (which is going round Africa) then the Canal Authority would lose out,” mentioned the chairman of Mandarin Shipping, Tim Huxley.

Global oil costs have had a uneven 12 months — from skyrocketing to greater than $130 per barrel after the Russian-Ukraine warfare broke out, to tapering to round $80-$90 per barrel in latest weeks.

The Panama-flagged ship Ever Given set sail towards the northeastern Egyptian metropolis of Ismailia for its departure from the Suez Canal and resumption of its voyage to the Dutch metropolis of Rotterdam, on July 7, 2021. Egypt introduced on Saturday that transit fees for all sorts of vessels passing via the Suez Canal will likely be elevated in 2023.

Anadolu Agency | Anadolu Agency | Getty Images

Huxley added that the elevated fees will likely be handed on to clients, which is able to in flip gasoline inflation.

The U.S. reported a 8.3% year-on-year increase in client costs in August. Rising meals and shelter prices offset a decline in gasoline costs.

Still a less expensive route

Another analyst mentioned that regardless of the rise in fees, the Suez Canal remains to be a considerably cheaper route for vessels.

A vessel on the Suez Canal in Ismailia, Egypt, on Jan. 3, 2022. “The savings of sailing via the Suez Canal are still very large, particularly due to the present very high … bunker prices,” mentioned an analyst.

Ahmed Gomaa | Xinhua News Agency | Getty Images

“The savings of sailing via the Suez Canal are still very large, particularly due to … very high oil and bunker prices. In addition, the shipping markets are generally seeing high demand and low vessel availability. This also encourages shipowners to send vessels via the fastest routes,” mentioned Niels Rasmussen, chief transport analyst of transport affiliation Bimco.

Rasmussen mentioned that he doesn’t anticipate shipowners to flip to various routes, corresponding to crusing south of Africa. 

“Shipping markets are generally seeing high demand and low vessel availability. This also encourages shipowners to send vessels via the fastest routes,” mentioned Rasmussen.

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