In an attempt to increase traffic, the Suez Canal Authority (SCA) is offering price reductions of up to 65% for ships coming from the US East Coast (USEC) heading to South and South-East Asian ports.
Container ships coming from ports located south of the Port of Norfolk, Virginia, heading to Port Klang, Malaysia, or its eastern ports are granted a reduction of 65% of its normal tolls.
Meanwhile those heading to the Port of Colombo and its eastern ports located up to Port Klang will receive a reduction of 55%.
The SCA added in a statement that vessels coming from Norfolk and its northern ports heading to Port Klang and its eastern ports will instead be granted a reduction of 45%.
The discount announcement, which comes less than a month before the opening of the expanded Panama Canal, applies to all relevant vessels sailing from their port of origin as of June 6 and will be enforced until September 3.
Analysts have long-speculated that the main route which the Suez and Panama canals will compete directly over is Asia-USEC.
According to the canal authority, the toll cut will be renewed following the end of this 90-day “experimental period”.
In order to benefit from the toll cut, companies have to submit a request through their shipping agencies before sailing, the SCA’s statement continued.
“The ship must not call any port in between port of origin and port of destination for commercial purposes provided that ship’s operator must forward a formal declaration about that,” the canal authority added.
“In case of calling at in between ports for non-commercial purposes, the authorities of these ports have to submit a certificate to the SCA, stating the reasons of calling.”
To benefit from the toll cut, companies must submit a certificate from the last port of origin including the date of sailing, as well as a certificate from the first port of arrival declaring the date of arrival, within 60 days from the date of the canal’s transit.
The ships’ agencies have to submit a statement undertaking to pay the granted reduction if the vessels fail to meet the conditions by either calling in between ports for commercial reasons, or failing to submit the necessary documents in time.
The US$8.5bn Suez Canal’s expansion project was inaugurated in August 2015.
In April 2016, the SCA announced a 30% reduction of its normal tolls for ships travelling from the Port of New York and its southern ports to Port Klang and its eastern ports.