The toll for vessels using the Suez Canal is set to rise by 15% next year with the exception of dry cargo and cruise ships which will increase by 10%. The Suez Canal Authority (SCA) has increased the transit toll from January 2023. The increases rely on a number of pillars, the significant one of which is average freight rates for multiple times of vessels.
The toll for all the vessel types including tankers and containerships will get hiked by 12%, however, the dry bulk ships where the charters rates are quite low, and the cruise ships, a sector that has still not recovered from the pandemic shutdown are the only exceptions. This increase has come at a time when already the liners are facing a hike in fuel costs but the good part is that the Suez Canal offers a shorter route between Asia and Europe.
Adm. Ossama Rabiee, Chairman and Managing Director of the Suez Canal Authority has said that there were substantial and frequent increases within the past period; particularly in containerships’ freight rates, compared to those recorded before the Covid-19 pandemic. The transit toll will be realized by navigational lines throughout 2023 even though the congestion is increasing in ports worldwide, as well as the fact that shipping lines have secured long-term shipping contracts at very high rates. He further added that this hike is unavoidable in the current global maker scenario with global inflation over 8% and a significant increase in the operational and navigation costs for the Suez Canal.
The SCA adds emphasis that it looks at a number of mechanisms with the objective of having its pricing policies adjust with the changes in the maritime transport market and to ensure that the canal remains the cost-efficient and still the least expensive route compared to the alternative routes.
These take the form of rebates of up to 75% for explicit sectors of shipping for stipulated periods if market situations result in the canal being less competitive.