Suez Canal offers second toll sweetener to VLCC operators

A 45% reduction from the applicable canal transit tolls, excluding other services dues, is being offered to VLCCs of over 200,000 dwt ballasting from the Gulf of Mexico, the Caribbean and the north coast of South America to the Middle East.

The new discount follows an “experimental” toll announced by the SCA last month which Seatrade Maritime News learned could save VLCC owner/operators in excess of $70,000 for each northbound transit from the Red Sea to the Mediterranean.

The canal is one of Egypt's main sources of foreign currency and the new toll is another thinly veined attempt to drum up revenue as the country confronts its $8bn bill for the expansion of the Suez Canal and renewed competition from the widened Panama Canal.

The expanded Panama Canal has quickly regained some of the Asia-US East Coast container trade it lost to the Suez which was a longer distance to sail but offered a better economy of scale equation compared to the 4,000-5,000 teu vessels which could be handled in the now dated panamax days.

In a fresh blow to the SCA, Maersk Line is the latest player to reconfigure its Asia-US East Coast service. Maersk’s is to deploy 11 of its 8,500 boxships on the new TP12 round-the-world route which transits the Suez just once (on the return leg to Asia) instead of both ways as before.

An increasing number of container lines have veered clear of the Suez Canal and its tolls on the backhaul route from the US East Coast to Asia. The SCA responded in March by offering lines a 30% discount on tolls for containerships bound from US east coast ports - from New York southwards - transiting the canal with their first call in Asia being at Port Klang, Malaysia or eastwards. With no takers by May the discount was increased to as much as 65% last month.

Egyptian President Abdel Fattah al-Sisi inaugurated the widened Suez Canal last year, a project designed to double daily traffic and increase annual revenue to more than $13bn by 2023.

To qualify for the SCA’s latest 45% discount VLCC operators must submit a request a minimum of 60 days before transit, subject to authorised port of origin and port of arrival documentation including ballast calculations from the former.

Add Seatrade Maritime News to your Google News feed.