In a radical shift for its pricing mechanism, the Suez Canal Authority is in discussions with a number of the world’s leading containerlines in a move that could intensify the battle for business the waterway is fighting with the expanded Panama Canal.
Egyptian authorities are pushing for the largest lines including Maersk, MSC and CMA CGM, to sign up to a new pricing structure where discounts are offered if the shipping firms agree to pay for three years in advance rather than the traditional model of individual transit contracts.
The Suez Canal inaugurated a second channel a year ago to allow two-way traffic in a bid to double revenues to $13.2bn by 2023. However, the slump in world trade has actually seen revenues fall in the past 12 months.
The canal had been attracting greater business from boxlines heading from Asia to the US East Coast prior to the opening of the expanded Panama Canal earlier this year. However, the revamped Central American waterway has since clawed back most of this traffic.