Egypt has announced that it will be raising transit fees for ships passing through the Suez Canal by 15% beginning next year.

The Suez Canal Authority (SCA) made the announcement, noting that transit fees for dry bulk and cruise ships will also be increased by 10% starting January 1, 2023.

"The Suez Canal Authority has issued new resolutions on the Suez Canal transit tolls that are to be applied in 2023," the authority said in a statement on September 17.

"Adm. Ossama Rabiee, SCA's Chairman and Managing Director, has announced increasing the transit tolls for all types of vessels by 15% during 2023 while that increase is at 10% for dry bulk ships and cruise ships as of the beginning of January of next year," the announcement added.

Rabiee noted that the fee hikes are "inevitable and a necessity" as he blamed worsening global inflation for making the waterway's operations, maintenance, and maritime services more costly.

SCA added that determining the Suez Canal transit tolls rests on a "number of pillars" — the most significant is the average freight rates for various types of vessels.

"In this regard, there were considerable and consecutive increases within the past period; especially in containerships' freight rates, compared to those recorded before the COVID-19 pandemic which will be reflected in the high operational profits that will be achieved by navigational lines throughout 2023 in light of the continued impact of the disturbances in global supply chains and the congestion in ports worldwide, as well as the fact that shipping lines have secured long-term shipping contracts at very high rates," Rabiee said.

Still a cheaper route than alternatives

The SCA chief also pointed out the impact the increased energy prices have on the equation of tolls calculation where the continued increase in crude oil prices and the increase in the average LNG prices have both led to a rise in the average prices of ships bunker and consequently an increase in the savings ships achieve by transiting through the Suez Canal —  one of the world's most important waterways —  compared to other alternative routes.

"The increase is inevitable and a necessity in light of the current global inflation rates that reached more than 8% which translates into increased operational costs and the costs of the navigational services provided in the Canal," Rabiee added.

"It was emphasized as well that the SCA adopts a number of mechanisms with the sole aim of having its pricing policies cope with the changes in the maritime transport market and to ensure that the Canal remains the most efficient and least costly route compared to alternative routes."

The Suez Canal accounts for roughly 10% of the global maritime trade, including 7% of the world's oils — which connects the Red Sea and the Mediterranean.

SCA earlier reported that 20,649 vessels passed through the canal last year, a 10% increase compared to 18,830 vessels in 2020. The annual revenues of the canal reached US$6.3 billion in 2021 which is the highest in its history.

 Some 1.27 billion tons of cargo were also shipped through the vital Egyptian waterway earning the massive transit fees recorded for the year.