The Suez Canal Authority (SCA) has announced another hefty price hike for transit tolls that comes into effect from 2023.
SCA Chairman and Managing Director, Ossama Rabiee, announced a 10% hike for dry bulk ships and cruise ships, and a 15% increase in transit tolls for all other types of vessels over the weekend.
The new transit tolls will come into effect on January 1.
In justifying the price hike, Rabiee said the SCA had applied a balanced and flexible strategy on pricing that served its own interest and that of its clients, taking into consideration the changes in the global economy, including calculating a vessel's transit tolls depending on the savings it achieved by transiting through the canal.
SCA has already increased its toll fees twice this year – in February and March – attributing the price hikes to growth in global trade.
Rabiee said the increased transit tolls had taken into account the ever-increasing daily charter rates for most types of vessels that had reached unprecedented levels and were forecast to continue rising in 2023.
Daily charter rates for crude oil tankers had increased on average by 88%, compared with the average rates of 2021, while the average daily charter rates for liquid natural gas (LNG) carriers had risen 11% for the period.
The SCA said in a statement that the rise in shipping demand and prices would be reflected in shipping lines’ operational profits throughout 2023.
“There were considerable and consecutive increases within the past period, especially in containerships’ freight rates, compared with those recorded before the Covid-19 pandemic.”
The continued impact of the disturbances in global supply chains and the congestion in ports world-wide, as well as the fact that shipping lines have secured long-term shipping contracts at very high rates had also been taken into consideration.
Rabiee said increased energy prices had also impacted on the calculation of the toll fee hikes. The continued increase in crude oil prices over $90 per barrel, and the increase in the average LNG prices above $30 per million thermal units, had both led to a rise in the average prices of ships bunkering, and consequently an increase in the savings ships achieved by transiting through the Suez Canal compared with alternative routes.
He added that the increase was “inevitable and a necessity” in light of the current global inflation rates that had reached more than 8% and had led to increased operational costs and the navigational services provided in the canal.
The SCA expects its annual revenues to rise by $700 million after the new toll fees are implemented next year. The SCA earned record earnings of $7 billion for the 2021/2022 financial after introducing a raft of toll hikes during the period.
