Suez Canal To Increase Transit Fees For Ships From January 2024

Fees for sailing in the Suez Canal are expected to rise by almost 15% for most vessel types from 15 Jan 2024 with some relaxations for container vessels out of ports of North Europe.

General rates for container vessels, car carriers, chemical, crude, and product tankers, as well as gas carriers, will experience a 15% rise in the charges associated with Suez Canal transit, while roro and dry bulk vessels are going to be charged 5% extra from the same date, per the Suez Canal Authority (SCA).

Suez Canal
Representation Image

Besides, an additional circular published by the authority highlighted that container vessels heading to the Far Eastern spots from North West Europe are going to be exempted from the rise in canal charges.

Container ships directly coming from ports in northwest Europe (and the Tangier port) from the Algeciras port to Port Klang as well as its Eastern ports in Southeast Asia and the Far East are reportedly exempted from the 15% rise, mentioned the SCA.

The exemption of charges for container vessels sailing directly to the Far East will also be in place from 15 January but will expire on 30 June 2024; it is yet not clear if an extension will be in place at that point.

Vessel operators who wish to be exempt from higher rates have to submit a special request via the firm’s shipping agent with the vessel and cargo details, the vessel’s port of origin and the destination, before departure from the European port, and the scheduled arrival time at the Suez.

Besides, the authority also stipulates that the vessel shouldn’t call intermediate ports during the voyage from North Europe to the Far East for any kind of commercial activity.

In case the ship has called at intermediate ports for various non-commercial causes, a certificate issued by the relevant port authority or any other competent authority will be needed mentioning the reason for such a call, stipulated by the SCA.

Industry experts have said that the exemption for container vessels has been exclusively designed to encourage vessels that presently make the backhaul trip via the Cape of Good Hope in Africa to come back to the shorter Suez Canal channel.

Chronic overcapacity has noticed that some carriers like Ocean Network Express lower the level of available capacity by slowing vessels down and also by sailing via the Cape adding over 3,000nm to the vessels’ journey, 11,720nm compared to 8,440 via Suez.

Back in 2020, several operators started sailing their ships via the Cape of Good Hope when a slump in demand due to COVID-19 and in oil prices experienced bunker costs also fall substantially. In 2020 (May), heavy fuel oil was estimated at under $200 per ton. Today’s prices are more than that on average.

References: Container News, The National News

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