Egypt lifts Suez Canal transit fees after shipping container boom

THE Egyptian government has raised fees for ships passing through the Suez Canal even as it posted record traffic fuelled by a global boom in online shopping.

Transit tolls for nearly all types of vessels will increase by 6pc from February, the state-owned canal authority said. Only cruise liners and vessels carrying liquefied natural gas will be excluded from the fee increase. The move comes after the canal reported record levels of traffic this year, as demand for shipping roared back following a lull in the early months of the coronavirus pandemic.

In the first 10 months of 2021, the number of ships using the artificial waterway increased by 8.8pc to 17,020 and the tonnage carried rose 8.4pc to 1.1bn tons. Revenues for the year to the end of June hit $5.8bn (£4.3bn) as a result, a record level.

Some 12pc of global trade passes through the Suez Canal, with foodstuffs, consumer goods and fuel all transported through the waterway.

The Suez Canal’s key position in global supply chains was highlighted in March when the Ever Given, a giant container ship, ran aground on the banks of the canal, causing traffic jams that could be seen from space and delays to freight deliveries around the world.

The Ever Given’s load also offered a window on the varied goods that are transported through the canal, spanning citrus fruits, tofu, barbeques, sun loungers, swimwear and lawn mowers, as well as furniture sold by Ikea and electronics sold by Dixons Carphone.

The UK Chamber of Shipping estimated that putting up fees for the canal by 6pc will add roughly $1.35 per container to shipping costs.

For a ship the size of the Ever Given – which can carry around 20,000 containers – that would see its total fee rise from about $450,000 to $477,000.

However, Peter Aylott, the chamber’s director of policy, said this was a tiny fraction of the value of the goods most big ships are carrying. The Ever Given’s cargo was worth more than $100m.

Mr Aylott added: “Yes, this is going to mean increases in costs for shipping companies and their customers. But they will not be high in comparison to the value of the cargo, so it is unlikely to affect consumer prices.

“What is having a very big impact on prices at the moment is market forces, including the high demand we have seen recently for shipping, and the cost of fuel, which has gone up by 60pc in just the past year.”

Competition for space on container ships has grown even fiercer in recent weeks as businesses race to secure goods in time for Christmas. Vessels carrying liquefied natural gas have also been in high demand ahead of winter.

The amount of liquefied natural gas transported in October alone almost doubled to 9.3m tons, the Suez Canal Authority said.