Significant Decline in Transit Vessels and Revenue at the Suez Canal!

The Suez Canal saw a revenue drop of $2 billion last year.

The Suez Canal Authority (SCA) reported that its revenue fell by approximately $2 billion compared to the previous year. In the fiscal year 2023/24, SCA's revenue fell from 9.4 billion Australian dollars in the previous year to 7.2 billion Australian dollars, a decrease of about 23%. The total tonnage passing through the canal dropped by a third, and transit vessels decreased by about 22% year-on-year.

The decline in revenue is partly due to the impact of Houthi attacks on Red Sea, which began in November 2023, after half of the SCA fiscal year had already passed. Therefore, the numbers partly reflect a normal flow of canal traffic from the summer and fall of the previous year.

The canal is a major revenue source for the Egyptian government and one of the leading generators of foreign currency.

While the reduction in canal revenue is a setback, it has unexpectedly benefited shipping carriers. The long-term rerouting of ships around Africa has absorbed much of the excess tonnage in the market, pushing spot rates back into profitable track. Changes in the routing schedule have caused congestion at major transshipment ports, extending as far as Singapore. To reserve more tonnage for the Cape of Good Hope route, global trade routes have been reshuffled, creating ripple effects across seemingly unrelated markets.

The SCA chairman stated that the tensions in the Red Sea are also affecting the broader maritime market, global trade flows, and supply chains.

Watch out for Suez Canal Transit Fees to Avoid Pitfalls!

Suez Canal Charges:

When vessels pass through the Suez Canal, transit fees are levied, along with other associated costs. These fees vary on the ship's size, type, tonnage, and the type of cargo.

Furthermore, additional fees apply to ships with a draft greater than 14.3 meters or a beam width greater than 66.4 meters. Besides, a waste fee applies when a ship needs to offload waste onto the shore. Other mandatory fees include port fees, pilotage fees, anchorage fees, and management fees. The Suez Canal Authority announced an increase in transit fees for some vessels passing through the Suez Canal, starting January 15, 2024.

According to the announcement, A 15% increase in transit fees will apply to crude oil tankers, petroleum product tankers, LPG carriers, LNG carriers, chemical tankers and other liquid bulk tankers, container ships, vehicles carriers, cruise ships, and special floating units. Moreover, a 5% increase will be seen on dry bulk carriers, general cargo ships, roll-on/roll-off vessels, and other ships. However, the rate hike will not include container ships sailing directly from Nordic and Western European ports to Far Eastern ports.

Starting May 1, the Suez Canal Authority will charge an additional $5,000 for ships that refuse or are unable to accept mooring services. The Authority also announced new mooring and lighting service charges, with each passing vessel being charged a fixed fee of $3,500 for mooring and lighting services. If a vessel requests lighting services or if its lighting does not meet navigational regulations, the lighting service fee will increase by $1,000, totaling $4,500, including mooring and lighting services.

In addition, should any defects be identified on a vessel during its transit through the Suez Canal, the vessel may face fines. (enter the link for more information), resulting in significant financial losses for ship owners. Unnecessary losses can be avoided and some fee reductions can be obtained if the shipowner can find a local professional canal agent to help with the documentation and provide reminders about important considerations.

There are many things to be aware of when a vessel passes through the Suez Canal. E-PORTS' professional canal agents will provide advance reminders of necessary precautions, communicate promptly with local authorities, and keep you updated with the latest transit information, ensuring a secure and seamless passage through the canal. For more assistance, you can call E-PORTS customer service at 400-920-8810 for consultation.