Shipowners, firms oppose hike in Suez Canal toll

Monday, 11 February 2013 00:00 - - {{hitsCtrl.values.hits}}

Indian shipowners, along with international shipping firms, have protested against the toll increase proposed by the Suez Canal Authority, which will come into effect from 1 May.

Over 90% of India’s export import trade use the Suez Canal.

For all but the smallest ships, the Suez Canal toll increases the range from about 3-5% based on tonnage and ship type.

These hikes follow the across-the-board increases of three per cent which were implemented in March last year despite industry protests, the International Chamber of Shipping (ICS) stated.

ICS, of which the Indian National Shipowners Association (INSA) is a member, is an international trade association for shipowners, representing all sectors and trades and over 80% of the world merchant fleet.

Meanwhile, INSA CEO Anil Devli said that if the toll charge hikes were to come through, most shipowners would try to pass them on to the customers through surcharges.

He did, however, admit that shipowners would find it difficult to pass on hike to customers given the overcapacity in the shipping market.

ICS Secretary General Peter Hinchliffe stated: “Most international ship operators are trading in the worst shipping markets in living memory due to there being too many ships chasing too few cargoes. This is not the time for the SCA to be announcing increases, which for some trades seem very dramatic indeed, and which many ship-owners will find impossible to pass on to their customers.” ICS added that the effect of these increases will be to give a spur to those owners who may already be considering the Cape route as a serious alternative.

The route via the Cape of Good Hope is already becoming relatively less expensive as many ships resort to slow steaming in an effort to reduce costs and to deliver the reductions in carbon dioxide emissions which are now demanded by their customers.

Moreover, the entrance to the Suez Canal, via the Red Sea and the Gulf of Aden, is already unattractive due to the continuing threat of Somali piracy, compounded by instability in the Yemen.