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Suez Canal Authority to Raise Transit Fees by 15% in 2023

Suez Canal International Corridor in Egypt (Asharq Al-Awsat)
Suez Canal International Corridor in Egypt (Asharq Al-Awsat)
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Suez Canal Authority to Raise Transit Fees by 15% in 2023

Suez Canal International Corridor in Egypt (Asharq Al-Awsat)
Suez Canal International Corridor in Egypt (Asharq Al-Awsat)

Egypt plans to raise fees for ships passing through the Suez Canal by 15% in 2023, the Canal Authority's Chairman Osama Rabie said on Saturday.

Transit fees for bulk and tourist ships will be raised by 10%, Rabie added.

The fee increase will be applied starting Jan 1, 2023.

Rabie confirmed in a press statement on Saturday the Authority’s keenness to apply a balanced and flexible strategy on pricing and marketing that serves its own interest and that of its clients.

“The strategy also takes into consideration the various changes in global economy through clear mechanisms that include calculating a vessel’s transit tolls depending on the savings it achieves by transiting through the Canal.”

This system works with navigational circulars issued and updated by the Authority according to real-time changes for all the categories of transiting vessels, which allows for amending the transit tolls effectively in case of changes in the global navigation market, the statement read.

“This eventually allows for providing navigational services for transiting vessels that are in line with the Authority’s standards policy to ensure the Canal's position at the forefront as the world's optimal, fastest and shortest route for all clients,” Rabie added.

Commenting on the reasons behind raising the fees, Rabie said they come in light of the Authority’s efforts to stay up-to-date with all the market changes in the maritime transport sector that monitor the ever-increasing daily charter rates for most types of vessels that reached unprecedented levels, adding that the forecast for next year shows a continuation in this rise.

He cited examples in the daily charter rates for crude oil tankers which increased in average by 88% compared to the average rates of 2021, and an increase by 11% in the average daily charter rates of LNG carriers compared to that of 2021.

“Determining the Suez Canal transit tolls rests on a number of pillars, most significant of which is the average freight rates for various types of vessels.”

“This 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 world-wide, as well as the fact that shipping lines have secured long-term shipping contracts at very high rates.”

Rabie also pointed out to the impact the increased energy prices have on the equation of tolls calculation.

The continued increase in crude oil prices over $90 per barrel and the increase in the average LNG prices above $30 per million thermal units have 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 compared to other alternative routes.

He also stated that 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.

Rabie further explained that the Authority 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 Authority does so by publishing a number of navigational circulars that allow for amending the pricing policies in case of any changes in the navigation market by offering incentives to vessels that operate on routes where the Suez Canal wouldn't normally achieve considerable savings, the statement noted.

These rebates may reach 75% of the Canal standard transit tolls for a specific period as per what the market dictates.

Rabies also pointed to the rebates granted through the Authority’s long haul committee that study each applying vessel's journey one at a time, which may reach 74% of the Canal standard transit tolls according to the conditions of the navigation market at the time the client applies for the rebate.

“This also applies to vessels that operate on routes where the Suez Canal wouldn't normally achieve considerable savings,” the statement explained.

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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.

Business

Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
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Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat

Saudi Minister of Finance Mohammed Aljadaan stressed Sunday that the world economy is going through a “profound transition,” saying emerging markets and developing economies now account for nearly 60 percent of the global Gross Domestic Product (GDP) in purchasing power terms and over 70 percent of global growth.

In his opening remarks at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla, the minister said these economies have become an increasingly important driver of global growth with their share of global economy more than doubling since 2010.

“Today, the 10 emerging economies in the G20 alone account for more than half of the world growth. Yet, they face a more complex and fragmented environment, elevated debt levels, slower trade growth and increasing exposure to geopolitical shocks.”

“Unfortunately, more than half of low income countries are either in or at the risk of debt distress. At the same time global trade growth has slowed at around half of what it was pre the pandemic,” Aljadaan added.

The Finance Minister stressed that the Saudi experience over the past decade has reinforced three lessons that may be relevant to the discussions at the two-day conference, which brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics.

“First, macroeconomic stability is not the enemy of growth. It is actually the foundation,” he said.

“Structural reforms deliver results only when institutions deliver. So there is no point of reforming ... if the institutions are unable to deliver,” he stated.

Finally, he said that “international cooperation matters more, not less, in a fragmented world.”

Business

Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
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Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Sunday that world growth still lacks pre-pandemic levels, expressing concern as she expected more shocks amid high spending and rising debt levels in many countries.

Georgieva spoke at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla.

The two-day conference brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics to deliberate on policies to global stability, prosperity, and multilateral collaboration.

Georgieva said that the conference was launched last year in recognition of the growing role of emerging market economies in a world of sweeping transformations.

“I came out of this gathering .... With a sense of hope for the pragmatic attitude and determination to pursue good policies and build strong institutions,” she said.

Georgieva stressed that “good policies pay off,” and said that growth rates across emerging economies reached four percent this year, exceeding by a large margin those of advanced economies that are around 1.5 percent.