EMEA News
Suez Canal Toll Hike Could Push Ship Owners to Alternate Route
Ship owners' trade group the International Chamber of Shipping (ICS) is protesting planned toll increases for the Suez Canal.
The group says the increases, which the Suez Canal Authority (SCA) plans to implement on May 1, 2013, amount to between 3 and 5 percent for all but the smallest ships.
The authority already raised tolls by 3 percent last March.
"Most international ship operators are trading in the worst shipping markets in living memory due to there being too many ships chasing too few cargoes," said ICS Secretary General Peter Hinchliffe.
"This is not the time for the SCA to be announcing increases, which for some trades seem very dramatic indeed, and which many shipowners will find impossible to pass on to their customers."
Hinchliffe said the increases may push ship owners to use an alternate route around the Cape of Good Hope, which he said is becoming less expensive as ships adopt slow steaming.
The SCA said the Suez Canal route is also becoming less appealing because of the threat of piracy in the Red Sea and the Gulf of Aden, as well as security concerns around rioting and political instability in Egypt.
The SCA said the fee increase, which amounts to 5 percent for oil and petrochemical tankers, 2 percent for containers and car carriers, and 3 percent for all other vessels, was based on recent studies of the prospects for global economic and trade growth, Egyptian news site Ahram Online reported.
"Usually, decisions to raise toll fees are announced on 31 December of each year," said Seood Ahmed of the SCA.
"The decision coming one month late [this year] means there was a change of plans; the government might have taken the decision to raise much needed public revenue."
The Suez Canal represents a major source of foreign currency for the country.
