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The Suez Canal Authority said it plans to lure container cargo through the canal even while it raises transit fees to take advantage of booming westbound trade from Asia.
“We want to lure more containers into using the U.S. East Coast ports via Suez,” Reuters quoted Adm. Ahmed Fadel, the chairman of the Suez Canal Authority, at a press conference at the end of the year. “We will give service with competitive and lower prices.”
Though the canal may lower prices to entice Asia-U.S. East Coast services through the canal, overall transit fees will rise by an average of 7.1 percent, Bloomberg reported, with liquefied natural gas tanker fees going up 10.5 percent, oil tanker rates rising 7.3 percent and containership fees up 5.7 percent. It will be the first fee hikes since April.
Yet despite the increase in transit fees, Fadel said the Suez remains competitively priced.
“We expect the economic boom in India and China to continue, and that will translate into more seaborne trade,” Fadel said, according to the Bloomberg report. “With the continuous rise of oil prices, the Suez Canal will remain the cheapest route for ships.”
The Suez has seen its volumes jump as Asia-U.S. East Coast and Asia-Europe trades have increased. The move to attract U.S.-bound cargo with lower transit prices can also be seen as a move to lure cargo away from the Panama Canal, where transit slots are at a premium, reflected by transiting costs that have risen steeply.
Paul Bingham, economist for Global Insight, said that Suez services to the U.S. East Coast had not grown as much as he would have imagined at the beginning of the year, but that growth could come yet, perhaps after 2008.
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