Suez Canal Authority Fires Back at Reports Saying Vessels are Making Money Saving Diversions Via Cape of Good Hope

by Ship & Bunker News Team
Thursday March 31, 2016

The Suez Canal Authority (SCA) has fired back at a recent report by Seaintel ApS (SeaIntel) indicating that low bunker prices are leading some vessels to save money by diverting via the Cape of Good Hope and avoiding the Canal, saying that the Canal's usage is actually increasing.

SCA's Chief Admiral Mohab Mamish says February 2016 saw 1,300 vessels transit the Canal, a 6.6 percent increase year-on-year from the 1,219 vessels seen in February 2015, while net tonnages transported in February 2016 reached 77.7 million tonnes compared to 73 million tonnes in February 2015.

SCA full year figures showed 17,483 vessels passed through the canal during the 2015 year, up 335 vessels / 2 percent over 2014, while net tonnages transported in 2015 grew 3.7 percent year-on-year to reach 998.7 million tonnes.

Mamish was also keen to point out that the extra traffic had in fact translated into extra earnings, with revenues for February 2016 said to be up 5.1 percent to USD $401.4 million.

Separately, local media reported 2015 revenues as totalling a record EGP 40 billion ($4.51 billion).

Specifically addressing SeaIntel's "allegation" that since the end of October 115 vessels had made the Cape of Good Hope diversion, Mamish said: "That number represents 0.6% of the total number of vessels that transited the Canal in 2015, which is a very small percentage that does not show a general tendency in the Canal traffic.

"The Suez Canal is the main route for world trade, and no other alternative can take its place in the field of maritime transport."

Local media has also sought to refute the idea that vessels were moving away from the waterway, with one report quoting Said Ayoub, a former captain and navigation expert, as saying "it is not logical to assume that vessels may increase their speed to reduce the sailing time via the Cape of Good Hope route, since vessels abide by different speed limits in straits and among commercial fleets."

"The speed is controlled to a great extent by the load and the weather conditions, which are factors that professional transport companies try to avoid by opting for shorter routes."

Longer routes also meant more maintenance costs, and shorter vessel life, Ayoub added.

In December, it was reported that the Bank of Alexandria believed the expanded Suez Canal would reduce total operating costs of maritime transportation companies by between 5 and 10 percent.