May 14, 2020 17:00:00

It will be cheaper to travel around the African continent than to cross the Suez Canal with too little fuel, and the traffic volume will decrease sharply

Artificial canal is located in the Suez Isthmus of Egypt

Suez Canal is a strategic point of shipping that connects Europe and Asia. However, due to record crude oil prices, the distribution cost of the Cape of Good Hope that travels across the continent of Africa has become cheaper, and the traffic volume on the Suez Canal has drastically decreased.

Lines using cheaper Cape of Good Hope route will cost Suez Canal $ 10m-The Loadstar
https://theloadstar.com/lines-using-cheaper-cape-of-good-hope-route-will-cost-suez-canal-10m/

Suez Canal Temporarily Cuts Fees for Some Ships-Ship & Bunker
https://shipandbunker.com/news/emea/591694-suez-canal-temporarily-cuts-fees-for-some-ships

Suez Canal drops fees to stem tide of ships heading via the Cape of Good Hope-Splash 247
https://splash247.com/suez-canal-drops-fees-to-stem-tide-of-ships-heading-via-the-cape-of-good-hope/

Crude oil demand has fallen sharply against the backdrop of the suppression of corporate activities and the economic downturn associated with the spread of new coronavirus infections.In April 2020, crude oil futures prices ended their first negative trade. It was As a result, fuel costs for ships have fallen, and the shipping industry is intensifying the move around the continent of Africa, avoiding the expensive Suez Canal.

by Wikimedia Commons

MarineTraffic, a vessel tracking service, said on Twitter, 'A heat map of the routes of ultra-large container vessels (ULVCs) over the last 30 days shows that many ULCVs have long routes between Asia and Europe (rather than the route through the Suez Canal). You can see that they are coming and going. Due to the drop in crude oil prices, ULVC has chosen to go around the Cape of Good Hope instead of the Suez Canal, which has a high toll fee. '

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# ULCV's are taking longer route from #Asia to #Europe and vice versa, as seen in this heat map we created of ULCV journeys over last 30 days.
In Drop #Oilprices Means Giant #Container Ships Choosing To Round The Cape, Rather Than Through Suez Where Tolls Can Be Expensive. Pic.Twitter.Com/EJ8vHkL0Jo

— MarineTraffic (@MarineTraffic) April 24, 2020

According to a survey by The Loadstar, a news site that handles information for the logistics industry, there is a difference of 3500 km between the Suez Canal Route and the Cape of Good Hope when traveling by sea route connecting Singapore and the Netherlands. However, when a large 20000 TEU -sized ship loaded with cargo travels through the Suez Canal, it costs about 700,000 dollars (about 74 million yen) per trip, so depending on the fuel cost, it may travel around the African continent. It is cheaper to go through the Cape of Good Hope.

Regarding the impact, 'the number of container ships that chose the Good Hope route avoiding the Suez Canal is a record number during the non-wartime period,' said French shipping magazine Alphaliner. According to The Loadstar, the profits lost by the Suez Canal Authority (SCA) under the direct control of the Egyptian government due to the decrease in traffic on the Suez Canal is estimated to be over 10 million dollars (about 1.07 billion yen).

by Harry and Rowena Kennedy

Therefore, SCA has decided to reduce the fare for a limited time from May 1st to June 30th. About 17% is discounted for container ships involved in European trade, and 60-75% is discounted for ships traveling from the east coast of America to Asia.

In a statement released by the SCA, 'Based on the current situation surrounding the shipping market and the global economy and a flexible marketing policy that respects the mutual benefit of the SCA and its customers, we will increase the incentive for container vessels through the Suez Canal. Has been decided. ”