Suez Canal offers up to 65% discount for Asia-North America east coast carriersWednesday, June 08, 2016 > 09:47:19
(Lloyds Loading List)
The Suez Canal Authority has announced plans to offer a significant discount on toll fees of up to 65% to traffic heading on the backhaul eastbound leg from the North American east coast to South and Southeast Asia, as the waterway looks to increase the pressure on its rival, the Panama Canal.
With immediate effect, containerships departing from Norfolk, Virginia, and North American ports further north heading to the port of Kelang in Malaysia and east Asian ports thereafter will be granted a 45% reduction on the Suez Canal’s normal tolls, according to the SCA.
Boxships heading to Kelang and ports further east from destinations south of Norfolk on the US east coast will receive a 65% discount on fees, while services originating south of Norfolk calling at the port of Colombo and eastern ports up to Kelang shall be granted a 55% reduction of the Suez Canal’s usual tolls.
The initiative follows a similar announcement from the SCA earlier this year for vessels using the Suez Canal from the port of New York and its southern ports heading to Asia, which were granted a 30% discount on fees from March 7 through to June 5.
With this reduction ending and new toll discounts coming into effect, it is a clear indication that the SCA is looking to up the ante in the competition for US east coast-Asia traffic.
At the same time, the SCA’s rival, the Panama Canal, is looking to lure back the business it has lost to the Suez on the trade route in recent years when its third set of locks open later this month.
The multi-billion dollar project will allow vessels of up to 14,000 teu to traverse the Americas for the first time, compared with the current maximum vessel size of around 5,000 teu.
In a circular to customers, the SCA said the revised toll fees have been introduced in respect of “new changes in the global shipping market and world economy” and are in line with its “flexible marketing policies and the dialogues held with the shipping lines”.
The SCA added that any customers looking to take advantage of the new discounts must submit a request prior to sailing, through their shipping agency.
The reduced fees will be introduced for a trial period of 90 days ending September 3, with the option of being renewed if the initiative proves successful.