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Regulations on the Suez Canal Tolls and Rebate System

caution suez canal toll ahead

This circular is prepared by Eldib Pandi’s Port Said office. The information contained therein is intended for personal use and is not for sale. For any clarification, please do not hesitate to write to or call Hany Maamoon or any other member of Eldib Pandi team. Contact details will be provided at the end of this circular.

With the expansion of the Suez Canal, decline of the global trade and drastic drop in the bunkers’ prices, one would imagine that the Canal tolls and rebate system should be readjusted in an effort to alleviate the financial difficulties being felt worldwide. However, the Suez Canal Authority (SCA) was not that responsive to these difficulties, till there most recent circular release which we will be discussed furhter down in this article . A number of our clients requested us to check the latest on the Suez Canal tolls and on the rebate system and here is what we would like to share.

(1) Reduction of the Suez Canal tolls concerning container ships coming from ports of the East Coast of America heading to South and South East Asian ports

The Suez Canal tolls are reviewed on annual basis, and very recently, the Suez Canal Authority allowed a reduction of Suez canal tolls for container vessels coming from East Cost America to South and South East ports of Asia; this is subject to the SCA Circular No. 2/ 2016 which states as follows:

Article one:
To meet the desire of ship’s owners and operators using the Suez Canal and to encourage more ships to transit the Suez Canal, the Suez Canal Authority has decided the following:

  1. Container ships coming from port of Norfolk and its northern ports heading to the ports of ( Port Kelang and its eastern Ports) shall be granted a reduction of 45% of the Suez Canal normal tolls
  2. Container ships coming from ports south of port of Norfolk heading to :
    • Ports of Port Kelang and its eastern ports shall be granted reduction of 65% of the Suez Canal normal tolls.
    • Ports of Colombo and its eastern ports located just up to port of “Port Kelang” shall be granted reduction of 55% of Suez Canal normal tolls.

Article Two:
Conditions of applying the Circular:

  1. Any company wishing to benefit from this circular has to submit a request before sailing through its shipping agency according to the attached form .
  2. 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
  3. 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
  4. Submitting a certificate from the last port of origin stating the date of sailing and a certificate from the first port of arrival stating date of arrival within sixty days from the date of Canal transit
  5. A statement submitted by ship’s agency undertaking to pay the granted reduction in case of calling in between ports for commercial purposes, or failing to submit the documents during the period stated above.

Article Three:
Circular No. 1/2016 shall be cancelled.

Article Four:

This circular takes effect as for vessels sailing from port of origin as of June 6, 2016 as an experimental period, for 90 Days (ends on September 3, 2016 )to be renewed.

According to the SCA circular 2/2016, Container ships coming from port of Norfolk and its northern ports heading to the ports of (Port Kelang and its eastern Ports) shall be granted a reduction of 45% of the Suez Canal normal tolls. Whereas, Container ships coming from ports south of port of Norfolk heading to Port Kelang and its eastern ports shall be granted reduction of 65% of the Suez Canal normal tolls. The granted reduction shall be 55% of Suez Canal normal tolls for vessels heading to ports of Colombo and its eastern ports located just up to port of “Port Kelang”.

(2) Regulations on Suez Canal Rebate System.

The rebate system for the long haul journeys is a very specific process that begins no later than 48 hours prior to sailing (ETD) from the last loading or discharging port before the Suez Canal by the completion of a rebate application that must be submitted to SCA.

Detailed information must also be submitted with such application, such as the vessels’ flag details as well as:

  • Vessel name & particulars
  • Speed & consumption
  • T/C hire (market rate)
  • Last port before the Suez Canal incl ETD
  • First port after the Suez Canal
  • Piracy related cost

The application must be submitted by well-experienced local agents for applying for rebate system from the SCA. Once the agents receive a reply from the SCA, they should make sure to notify the owners/charterers of the response. If a rebate is granted, it is only a percentage of the canal tolls, meaning it does not include costs for tugs, disbursements etc. If a rebate is grated, the local agents will ask the operator for full style of the load and discharge ports in order to collect the required documentation.

Documents required to collect the rebate:

  1. Bill of lading or cargo manifest
  2. Owner’s certificate
  3. Port of Origin
  4. Port of Destination
  5. Port of Bunkering (if any)

Moreover, the owners/charterers must remit the full estimated cost of transit (excluding any reduction or rebate) two days prior to the vessels’ transit. Once the vessel completes its first discharging operations at its first discharging port, they are urged to automatically forward he original “Owner’s certificate” to their local agents filing for their rebate.

Please note that as per SCA requirements, at least one document must be filed no later 6 months after the transit. Consequently, when all documents mentioned above have been (1) collected and (2) accepted by SCA the rebate amount will then be released and refunded to the responsible party. The release of rebated fund typically takes between 5 to 6th months after the vessel has completed its transit of the Canal.

(3) Calculation of toll fees

The SCA has posted a Toll Calculator to help vessels intending to transit to calculate an estimate of what they would be charged as tolls. We are giving you below the link for the toll calculator, which depends on specific variables related to the ship in question, including Ship’s type, hull status, ship’s status, Suez Canal Net tonnage and Gross tonnage and ship’s draft and beam.

Please contact Hany Maamoon for any further inquiries.

PORT SAID OFFICE CONTACT DETAILS

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 23rd July and Salah Eldin St.
Port Said, 42111 
Egypt

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Tel: +20 66 3239 779 / +20 66 3239 781
Fax: +20 66 3239 781
Email: portsaid@eldibpandi.com