ShareIMPACT OF EGYPT’S INCREASE IN FEES THROUGH THE SUEZ CANAL
On September 17, 2022, Egypt announced it would increase transit fees for all vessels passing through the Suez Canal.
The Suez Canal Authority issued a notice noting that the canal fee for oil tankers passing through the canal will increase by 15%, while the fee will increase by 10% for bulk carriers and cruise ships. calendar. The new policy goes into effect on January 1, 2023.
The Suez Canal means a lot to sea traffic in the world. Therefore, Egypt’s decision strongly affected the transportation of goods across the entire continent. The Executive Director of the Council of Ships of East Africa (SCEA), Gilbert Lagat, noted that East Africa depends on the Suez Canal because goods exported to Europe and goods imported from Asia both pass through the canal. .
East Africa depends on the most part on imports from Asia, which uses an alternative channel, while exports from the region must pass through the Suez Canal. This will further complicate exports and some ships may choose to change their destination based on economies of scale.
East Africa’s exports to Europe mainly consist of agricultural products. Crops such as coffee, tea, tobacco, cut flowers, fruits, vegetables and fish. Others are textiles and handicrafts, which are the region’s main exports abroad.
The director of the Suez Canal Authority, Osama Rabiee, said the fee increase was inevitable and necessary in the current growing global broadcast landscape. However, experts have noted that oil prices are falling and so if the canal’s price rises relative to competing channels, vessels are willing to detour and the Suez Canal Authority will lose market share.