File Photo: A cargo ship carriying goods passing through the Suez cannel. Photo courtesy of Suez cannel authorities Facebook page.
Tourist cruise ships and tankers transporting liquefied natural gas (LNG) are exempted from the fee rise, Chairman of the SCA Osama Rabie said in a statement.
The reason cruise ships are excluded from the new pricing is that tourism has been the most affected sector by the coronavirus crisis, he added.
"The tourism and travel sector has suffered major losses worldwide, including cruise ships and yachts, and is expected to complete its recovery by 2022," Rabie stated.
Regarding ships transporting LNG, Rabie said the exemption comes in light of the follow-up on the latest developments in seaborne LNG trade and to keep up with the flexible marketing policies of the authority.
However, the 2015 reduction of 25 percent granted to LNG tankers will be modified to 15 percent starting this month, he added.
Rabie said the SCA is keen to apply "a balanced and flexible" marketing and pricing strategy that fulfils the interests of both the authority and its clients and takes into account the global economic conditions, the statement added.
The Suez Canal – which connects the Mediterranean Sea and the Red Sea – is the shortest maritime route between Asia and Europe and the fastest crossing from the Atlantic Ocean to the Indian Ocean. The sea-level canal is also the longest in the world without locks, with a normal transit time from end to end of about 13 to 15 hours.
With around 12 per cent of world trade passing through the Egyptian waterway, the Suez Canal is one of the main foreign-currency earners for Egypt, yielding more than $5 billion in revenues annually.
Thursday’s decision was taken following "extensive" studies on the latest developments in the shipping market, global economic indicators, global trade movement, as well as periodic reports issued by the organisations working in the maritime transport industry, the statement said.
Although there was a 3.4 percent drop in its revenues, from $5.8 billion in 2019 to $5.6 billion in 2020, the man-made waterway has been witnessing traffic increases in the latest months.
On 29 September, the SCA recorded the highest daily transit rate in its history, with 87 ships traversing in both directions. In 2020, over 18,500 vessels passed through the waterway, with a daily average of 51.5.
The volume of freightages is expected to keep rising and therefore shipping companies are to achieve "good" profits, the SCA said, citing indications from the International Monetary Fund (IMF) and the World Trade Organisation (WTO).
The IMF expected global growth rates of 5.9 percent and 49 percent in 2021 and 2022, respectively. The WTO expected global trade traffic to continue to grow, leading to a rise in demand for maritime transport at rates of 6.7 percent and 4.7 percent, respectively, in 2022, the statement added.