In his meeting with more than 15 of the shipping lines representatives and shipping agencies to discuss ways of promoting joint cooperation
“The Suez Canal will remain the Group’s main navigational route... We were forced to reduce the number of voyages and vessels will soon transit through the Canal once more” MSC’s Operations Manager
Maersk Group Representative to MENA: The Group is keen on the return of its vessels to transiting through the Suez Canal once the situation stabilizes.
As one of the solutions on the table… Shipping agencies propose granting special privileges to vessels navigating between ports of the Mediterranean and the Red Sea
Adm. Ossama Rabiee, Chairman of the Suez Canal Authority, has met today with a group of representatives of shipping lines and shipping agencies to discuss the repercussions of the current situation in the Red Sea and Bab El-Mandeb region, and the extent of its impact on the maritime transport market. The meeting was held at the SCA’s headquarters, Al-Irshad Building, at the city of Ismailia.
In his speech, H.E. has emphasized the importance of the meeting, which serves as an extended and continuous platform for dialogue with all Suez Canal partners; including shipping agencies and shipping lines. This comes in light of the SCA’s keenness on establishing direct communication channels with all its clients to discuss the status quo in the Red Sea and Bab El-Mandeb region, to identify their needs, and discuss the proposed recommendations to promote cooperation with the Suez Canal.
Adm. Rabiee has asserted that the SCA bears in mind its clients’ interests and strives towards minimizing the impact of the current situation on global trade passing through the Canal through providing a bundle of navigational and maritime services that fit the needs of transiting vessels under normal and urgent conditions. These services include bunkering, maritime ambulance services, as well as maritime salvage, pollution fighting as well as ship repair and maintenance services in the SCA's shipyards, among other services.
H.E. has stressed the fact that the Suez Canal is an integral part of global trade, as it accommodates 12% of its volume, and 25% of global containerized trade. H. E. has also pointed out that the current situation poses more challenges to global supply chains in light of the increased duration of voyages, the higher operating expenditure of vessels, the increased freight rates and insurance expenses, and their direct impact on global supply chains which impacts consumers through higher prices of goods and delayed delivery dates apart from the adverse environmental impact associated with the vessels’ consumption of more bunker fuel and increase in the rates of carbon emissions as they use alternative routes.
On his part, Adm. Hatim El-Kady, Chairman of Kadmar Shipping, has pointed out in his participation via video conference that the current crisis imposes many challenges on Egyptian exports and imports in light of the soaring global freight rates. H.E. has called for the SCA’s consideration of granting more privileges to cruise ships and cargo vessels operating on specific navigational routes.
While Adm. Ehab El-Banan, Chairman of Clarkson Shipping Agency, has expressed his appreciation of the efforts exerted by the SCA to achieve active communication with clients since the beginning of the crisis which is valued to a great extent by all shipping lines and promotes partnerships. H.E. has pointed out that some shipping lines wish to receive some incentives and rebates in light of the increase in insurance costs for lines operating in the Red Sea and Bab El-Mandeb region, and suggested linking the rebate to the volume of cargo transiting through the Canal.
Whereas Mr. Hany El-Nady, Maersk Group Representative to MENA, commenced by thanking the SCA for the active communication with the Group, stressing the Group’s keenness on the return of its vessels to transiting through the Suez Canal once the situation stabilizes. That is in light of the Group’s being impacted by the repercussions of the current crisis as some of its vessels were directly assaulted during their passage through the Red Sea.
On his part, Capt. Ezz El-Din Labib, Operations Manager at MSC, has stressed that the Suez Canal will remain the main navigational route for the Group which resorted to reducing the number of its voyages through the Red Sea in light of the ongoing tensions, and that the upcoming period will witness the return of its vessels to transiting through the Suez Canal once more.
However, Capt. Mohammed Badawi, Managing Director of the Gulf Agency Company, has considered that the request of some shipping lines that the SCA grants rebates and incentives is not the optimal solution in light of the current crisis which is predominantly security-related rather than economical.
Mr. Mohamed Gaabary, representative of Inchcape Shipping Services, agrees with Capt. Badawi as he considers that granting rebates and incentives will not have a positive outcome except in particular cases that require careful consideration by the SCA’s economic research division.
Similarly, Mr. Waseem Shoukry, representative of Wilhelmsen shipping agency, agrees that the SCA’s pricing policies shall not be altered according to the current crisis, but some rebates can be studied and granted to some vessels struggling with high insurance costs, given that this is only done after thorough studying of each case.
Moreover, Mr. Ahmed Khalil, representative of Finmar Shipping Co. has adopted the same abovementioned viewpoint stating that the ship owners’ outlook on the current crisis is from a security perspective that is related to the safety of the crew, and with that in mind, granting rebates will not be the optimal solution.
On his part, Mr. Mohamed Hosni, representative of the shipping line Arkas, has called for studying the granting of some privileges to vessels linking ports of the Mediterranean and the Red Sea.
To that, Mr. Mohamed Ghazy, representative of the shipping line Express, has agreed to the abovementioned viewpoint of the necessity to study granting incentives and privileges to vessels carrying out multiple voyages to and from the Mediterranean and Ports of Aqaba and Jeddah.
At the end of the meeting, Adm. Ossama Rabiee has emphasized the SCA’s intention to hold periodical meetings with shipping lines and shipping agencies to continue discussing developments in the situation and adopt viewpoints that can minimize the impacts of the current tensions in the Red Sea region.