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EGYPT: New Suez Canal Transit Tolls Announced Starting April 2020

Suez Canal transit toll rates will be increased by 5% on the 2019 rates for dry bulk vessels and liquefied petroleum gas (LPG) carriers. Transit tolls on all other types of shipping, such as container vessels, tankers carrying oil and its products, LNG carriers, car carriers, general cargo vessels, Ro-Ro vessels, cruise vessels, will remain unchanged.

The changes were announced in an official statement released on 4 January 2020 by Osama Rabie, Chairman and Managing Director of the Suez Canal Authority. The decision on toll rates was made after careful analysis of developments in competitor routes; studies on developments in the maritime transport market; the state of the global economy; and the global trade outlook, according to Rabie. The rates reflect the desire to maintain traffic growth momentum at a challenging time for global shipping.

About 8.3% of the world’s global trade is currently shipped through the Suez Canal, including 100% of seaborne container traffic between Asia and Europe, and 25% of all global container traffic. Egypt has been steadily upgrading the canal in recent years to make it more competitive and attractive for business. In 2014, work commenced on the Suez Canal Corridor Area Project has cut transit times in half to 11 hours and increased the canal’s capacity to handle more and larger vessels. Chinese investment in the nearby Suez Canal Economic Zone, a major Belt and Road Initiative, has also attracted substantial investment in canal-related services and trade.

The investment is beginning to pay off. In 2019, the canal accommodated 18,880 vessels, an increase of 3.9% compared to that in 2018. Total net tonnage through the Suez Canal also grew to 1.2 billion tons in 2019, compared to 1.1 billion tons in 2018, an increase of 5.9%. Cargo tonnage transiting the canal also increased by 4.9% in 2019, with revenues rising to US$5.8 billion for the year, an increase of 1.3% on 2018. According to Rabie, the Suez Canal can now accommodate 100% of the global fleet of container ships; 92.8 % of its dry bulk vessels fleet; 61.9% of the oil tanker fleet; and 100% of the global shipping fleet, empty or partially loaded.

Content provided by Picture: HKTDC Research
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