Suez Canal boxship sweeteners extended

The Suez Canal Authority (SCA) has extended its toll rebate sweeteners – as much as 65% in some cases – for containerships sailing from the US East Coast to South East Asia and beyond until the end of 2016.

With an experimental 90-day discount period ending 3 September, the SCA has “renewed” the offer till December 31 in line with the authority’s “flexible pricing policy and considering the dialogue with the shipping lines”.

The announcement comes as low bunker prices and to a lesser extent increased competition from the expanded Panama Canal continues to impact on the SCA’s revenues, particularly from lines deciding to sail the additional 2,000 plus nm via the Cape of Good Hope on the backhaul to Asia.

In a bid to recapture traffic, the amendment of “SCA circular 2-2016” confirms all containerships coming from ports north of the Port of Norfolk (Virginia) on the US East Coast and heading to Malaysia’s Port Klang and ports eastwards are eligible for a 45% rebate on canal tolls up to December 31, 2016.

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For vessels departing from ports south of Norfolk and calling at Port Klang and eastwards can claim a 65% discount, while those calling Colombo and eastwards are entitled to a 55% rebate.

The SCA originally offered a 30% rebate for containerships headed from New York southwards, transiting the canal with their first call in Asia being at Port Klang or eastwards, in early March. But its hand was forced when there were no takers after six weeks, according to analysts Alphaliner.

Container lines have opted to sail via the Cape of Good Hope, even though the distance is 12,412 nm from New York, compared to 10,117 nm via the Suez Canal, due to lower operating costs as a result of low bunker prices.

Posted 01 September 2016

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Kent Gray

Middle East Correspondent

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