Passage through the Suez Canal will rise in price

Passage through the Suez Canal will rise in price

The Suez Canal Administration has officially announced its intentions to increase the fare for vessels of almost all types in the first quarter of 2022.
This decision is explained by the significant congestion of the Canal, which increased even more by the end of the current year, as well as the desire to partially compensate for the risks associated with blocking traffic on this water main (as happened in the spring of 2021 due to the accident of the container ship Ever Given) and the corresponding financial losses from - for similar forced downtime possible in the future.

According to preliminary data, the tariffs for the passage through the Suez Canal from February of the coming year will be increased by 6%. According to the current plans of the Suez Canal Administration, an exception can only be made for LNG tankers and cruise ships.

Liquefied gas traffic through the Suez Canal continues to grow. In particular, as of the end of October, 84 vessels of this type passed through it (compared to 47 a year earlier), and the volumes of gas transported in the period under review were increased by 87%. However, despite this, the Suez Canal Administration is considering not only not increasing, but also (possibly) significantly reducing tariffs for gas carriers in order to support the satisfaction of the growing global demand for energy.

As for passenger liners, the cruise market is already very sensitively affected by the consequences of the Covid-19 pandemic, so the initiatives of the Suez Canal Administration not to raise fares for passenger ships are aimed at restoring passenger traffic through Suez. By the way, earlier the Administration of the Panama Canal also spoke in favor of supporting passenger shipping.

According to the calculations of the Suez Canal Administration, the historical maximum in the number of ships passing through the Suez was recorded on September 29, 2021 - 87 units with a total tonnage of 4.8 million tons. Of these, 38 vessels proceeded in the southern direction during the day, and 49 in the northern direction.

And in October, an absolute monthly record was set: 1,847 transit passages in both directions (+ 14% versus October last year). Their total net tonnage also increased significantly - up to 112.1 million tons (+ 11%). As a result, the revenues of the Suez Canal Administration also increased significantly - to $ 551.1 million (+ 12%).

In total, over ten months of this year, the total tonnage of ships passing through the Suez Canal, compared to the same period in 2020, increased by almost 9%, and the number of ships amounted to 17,020 units. For comparison, from January to October (inclusive) of last year, “only” 1,380 vessels of various types passed through the canal.

The Channel Administration has previously agreed on its decision to increase tariffs with the leadership of the International Monetary Fund and the World Trade Organization. In the future, further adjustments to the fare for the passage through the Suez Canal are possible. Their main goal is to maintain the competitiveness of this route, preventing the dispersion of freight traffic to alternative directions. In particular - to the already operating Northern Sea Route and the promising international transport corridor "North - South".

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