25-06-2016

New Suez Canal toll could save VLCC’s $70,000 as authority looks to boost traffic

suez

An “experimental” new toll for VLCCs transiting the Suez Canal could save the ship’s operator in excess of $70,000 for each northbound trip from the Middle East to the Mediterranean, Seatrade Maritime News has learned.

VLCCs transiting the canal from the Red Sea, after discharging at the SUMED oil pipeline at the Ain El Sokhna Terminal, will be charged a “lump sum” of $155,000 if carrying more than 250,000 in deadweight tonnage.

The same VLCC faces a $230,000 tariff on their return ballast voyage, Egypt's Suez Canal Authority (SCA) announced in the new toll circular published last week.

A leading ship agent has confirmed to Seatrade Maritime News that the new northbound charge of $155,000 is inclusive of SCA convoy booking fees, escort tugs and any applicable late arrival penalties.

The previous toll of $130,000 did not include these charges, approximately $30,000 in tug fees paid on every laden transit and as much as $42,000 for limit time penalties.

“Therefore, the new tolls are considered good savings for VLCC owner/operators,” the ship agent said.

The experimental toll is a seen as a sweetener to owner/operators who have increasingly veered away from the Suez and its tolls and opted instead to sail the longer route to the Mediterranean via the Cape of Good Hope.

Until October 2013 laden VLCCs could not transit the Suez Canal and had to transit via the Cape when a scheme started for fully loaded vessels to lighter part of their cargo. Lightering of VLCC’s takes place at the Ain El Sokhna Terminal, adjacent to the southern entrance of the Suez Canal, with oil then transferred overland via a 350km pipeline to the terminal at Sidi Kreir, 30 km west of Alexandria, where it is picked up again.

However, low bunker fuel prices have helped shipowners balance their abacuses despite the additional 2,700 miles around the tip of Africa and the stiff financial headwinds battering the shipping industry globally.

Since late last year an increasing number of container lines have opted to avoid the Suez Canal on the backhaul route from the US East Coast to Asia. In response in March this year the SCA offered lines a 30% discount on tolls for containerships bound from US east coast ports from New York southwards, transiting the canal with their first call in Asia being at Port Klang, Malaysia or eastwards. With no takers by May the discount was increased to as much as 65% this month.

The canal is one of Egypt's main sources of foreign currency and the new toll is a thinly veined attempt to drum up revenue as the country confronts its $8 billion bill for the expansion of the Suez Canal. Egyptian President Abdel Fattah al-Sisi inaugurated the widened canal last year, a project designed to double daily traffic and increase annual revenue to more than $13 billion by 2023.

The new Suez tariffs, which took effect on 16 June, are available to VLCC owner/operators for six months and are to be “renewed”, the SCA said in the toll circular. Any company wishing to take advantage of the discounted tariff must submit a request before transit through its Maritime Agency.

Source: Seatrade Maritime 

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